The rupee snapped its two-day losing streak and rose by eight paise against the US dollar on Wednesday, December 13, to settle at 73.76 (provisional), amid sustained foreign fund inflows and strong domestic equities. At the interbank foreign exchange market, the domestic unit opened at 73.89 against the dollar and registered an intra-day high of 73.73. It witnessed a low of 73.90. The local unit plunged by six paise to 73.90 against the greenback in opening trade today, due to weaker Asian peers amid concerns over the new COVID-19 strain. The rupee finally settled at 73.76 against the American currency, registering a surge of eight paise over its previous close. On Tuesday, December 22, the local unit had settled at 73.84 against the dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined by 0.29 per cent to 90.39. On December 21 (Monday), the rupee witnessed a massive fall of 23 paise, settling at a two-week low of 73.79 against the dollar. According to provisional exchange data, the foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,153.00 crore on a net basis on December 22.
“Rupee rebounded after two days of decline. Risk-on sentiments along with a weaker dollar index supported the local currency. The pound advanced against the dollar as the EU”s chief Brexit negotiator said the two sides were ready to make ”a final push,” said Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities.
“The volatility and uncertainty sparked by COVID-19 pushed USDINR to hit a record high of 76.90, but infusion of excess liquidity by both government and central bank across the global supported the risk appetite and reversed the uptrend in spot to 72.75,” said Mr. Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services
”Until the global economy is capable of recovering at a rapid pace once COVID-19 is defeated, the upside risk to USDINR spot will remain intact. So even in 2021, as long as USDINR spot is trading above 72.75-73.00, the trend will be bullish with 74.50 being the key resistance. A break of 74.50 will open doors for 75.25 and then 76.30. While, a break of 72.75 will push the spot price to 71.50-72.00 zone,” he added.
On the domestic equity market front, the BSE Sensex ended 437.49 points or 0.95 per cent higher at 46,444.18, while the broader NSE Nifty climbed 143.85 points or one per cent to 13,610.15.
“Today, the market has followed to the pattern of continuation. Nifty 50 index closed above the crucial level of 13550 that could lift indices to 13700/13780 levels again. Since the last 2 days, Technology and Pharmaceutical stocks are offering significant support to the market now it’s a turn of Financials to perform otherwise it would be tough for Nifty to hit the level of 13780 again,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
Brent crude futures, the global oil benchmark, rose 0.02 per cent to $ 50.09 per barrel.
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