The rupee on Friday, January 7, closed higher by 12 paise at 74.30 (provisional) against the US dollar, tracking positive domestic equities. At the interbank forex market, the domestic unit opened at 74.41 against the dollar and registered an intra-day high of 74.25. The local unit ended the day at 74.30, registering a gain of 12 paise from its previous close of 74.42.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, fell 0.21 per cent to 96.11. According to forex traders, a positive move in Indian equity indices and stronger Asian currencies aided sentiments, and concerns over Omicron, firming crude oil prices capped the appreciation bias of the local unit to some extent.
Mudra Desk, Emkay Global Financial Services:
“Hawkish Fed minutes did not have the desired effect on the USDINR spot and instead of appreciating it is still hovering flat around the 74.50 zone. The focus is on tonight’s US NFP data for guidance on the trajectory.
A set of solid job data, especially in wage growth, could be likely to propel the USDINR spot higher, but a dismal data will weigh on the spot, pushing it below the 74 zone next week. Broadly, we expect USDINR spot to trade in the range of 73.85-75.
Mr Amit Pabri, MD, CR Forex:
“The US 10-year benchmark yield edged higher to test its high in nine months. The short term yields – 1 , 2 , 3 and 5 year yields saw trading at their highest levels since the start of the pandemic . The market has started discounting the four rate hikes by Fed and this can be a big positive for DXY and hence USDINR may also start moving higher in the near term.
We can see the USDINR pair hovering near the bottom of the 74.10-74.30 zone as long as the time flow stories are coming to the table. Once this happens, a sharp bounce towards 75-75.20 cannot be ruled out easily. Overall, the short term bias for the USDINR pair remains bullish.
Domestic Equity Markets Today:
On the domestic equity market front, the BSE Sensex closed 142.81 points or 0.24 per cent higher at 59,744.65, while the broader NSE Nifty ended 66.80 points or 0.38 per cent higher at 17,812.70.
Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities
“It was a volatile day for the markets, but the bulls finally won the battle, thanks to selective buying in oil and gas and other major regional stocks.
Moreover, on the intraday chart, the index has maintained a higher bottom formation which supports another uptrend. We are of the view that as long as the index is trading above 17700, the uptrend formation will continue till 17920-18000 and any further bounce will lift the index to 18100-18175 levels.
Foreign institutional investors were net sellers in the capital markets on Thursday as they offloaded shares worth Rs 1,926.77 crore, according to exchange data. Global oil benchmark Brent crude futures rose 0.99 per cent to $82.80 a barrel