The rupee on Thursday, October 14, closed 11 paise higher at 75.26 (provisional) against the US dollar on Thursday, October 14, amid heavy buying in domestic equities and weakness in the US currency – both of which strengthened investor sentiment. In the interbank forex market, the domestic unit opened at 75.27 against the dollar, and moved in the range of 75.20 to 75.37 during the trading session. In the opening trading session, the domestic unit advanced 12 paise to 75.25 against the greenback.
The domestic currency closed at 75.26 against the US dollar, registering a rise of 11 paise over its previous close. The local unit closed at 75.37 against the dollar on Wednesday, October 13. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.28 per cent to 93.81.
According to forex traders, fresh foreign capital inflows also helped the domestic unit gain for the second day in a row. However, a rise in crude oil prices in the international market limited the gains of the rupee, according to traders.
What Analysts Say:
”… the USDINR pair should correct towards 74.80 and 74.50 with an 80 percent probability. The key player for rupee management – “RBI”, has done a remarkable job so far by not intervening too aggressively in dollar selling and letting it be driven by market forces,” said Mr. Amit Pabri, MD, CR Forex said.
“However, with the bulk of the inflows on the way, it remains to be seen whether this too remains an active downside. Overall, the medium term trend for the USDINR pair remains bullish. But a healthy and stable one For the move, reform is needed,” Mr Pabri said.
Mudra Desk, Emkay Global Financial Services:
“DXY has seen a pullback, especially after Fed minutes signaled that central bankers may begin to ease, but the risk of a rise in crude oil prices to USDINR still remains. As long as USDINR spot crosses 75. The outlook is positive as long as it is trading up.
The next week is pretty light on the economic data front, but will focus on any announcements related to the IPO, which could weigh on the USDINR spot. So next week’s range could be 74.8-75.70 with a sideways bias.
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Limited:
After falling real yields in the US, USDINR spot closed 11 paise lower at 75.25 on gains and weakness in US dollar index. During the next week, USDINR may continue to see more range-bound price action in October futures between the 75.00 and 75.80 levels.
For USDINR to break below 75.00 or challenge 76.00, it needs to either move the US Dollar index down or the equity markets to move down.
Domestic Equity Markets Today:
On the domestic equity market front, the BSE Sensex closed 568.90 points or 0.94 per cent higher at 61,305.95, while the broader NSE Nifty ended 176.80 points or 0.97 per cent higher at 18,338.55.
Shrikant Chauhan, Head – Equity Research (Retail), Kotak Securities:
”Q2FY22 results season has started with large cap IT companies reporting healthy numbers. Rupee depreciation has also played its part in keeping IT stocks in the green. Amidst all these developments, the market continues to be bullish with both BSE Sensex and Nifty gaining over 2.5 per cent during the week.
Small and midcap indices outperformed during the week. The BSE Midcap index rose 3.6 per cent, while the BSE Smallcap index rose 2.8 per cent.
Foreign institutional investors emerged as net buyers in the capital market on October 13 as they bought shares worth Rs 937.31 crore, according to exchange data. Global oil benchmark Brent crude futures rose 1.30 per cent to $84.26 per barrel.