The rupee strengthened for the second session amid positive domestic equities and closed 15 paise higher at 74.46 against the US dollar on Thursday, July 22. At the interbank forex market, the local unit opened at 74.46 against the dollar and registered an intra-day high of 74.33. It saw a low of 74.53. The rupee closed at 74.46, which is 15 paise higher than the previous close. In the opening trading session, the domestic unit rose 18 paise to 74.43 against the greenback.
The local unit closed at 74.61 against the US currency on Tuesday, July 20. The forex market was closed on Wednesday, July 21 due to the festival of Eid. The domestic currency has gained 42 paise against the dollar in two consecutive sessions. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.01 per cent to 92.74.
What Analysts Say:
Mr Amit Pabri, MD, CR Forex:
“Globally, the dollar index remains consolidated around 92.78, while the yield on the US 10-year Treasury rises to 1.30 per cent for the second day, as investors take a break to reassure the impact of the new COVID-19 outbreak on the global economy. . Next, it remains to be seen whether growth in US yields remains above 1.3 percent.
In the previous session, the rupee retreated from its crucial resistance of 74.90 on the back of dollar selling by exporters. The next major important support of the pair lies in the range of 74.20-74.40 levels. With steady inflows due to Zomato IPO, RBI was seen buying dollars around 74.20-45 zone and curbing the rupee’s appreciation move.
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities:
“During this year, risk-free events have not lasted more than 24-48 hours. The past was no exception. After a brief sell-off in global equity markets on Monday, the risk-on mood is back strongly. Equities Markets are higher and US Dollar index is trading lower. Asian currencies are also consolidating against US Dollar.
The USD INR spot touched an intra-day low of 74.33, the lowest level since July 5. However, alleged RBI intervention pulled it back to 74.47 near trading close, which is still down 15 paise for the day.
All eyes are on the ECB meeting tonight. In the near term, USDINR may continue to oscillate within the range of 74.20-74.60 depending on RBI’s $demand and risks on the mood globally.
Domestic Equity Markets Today:
On the domestic equity market front, the BSE Sensex ended 638.70 points or 1.22 per cent higher at 52,837.21, while the broader NSE Nifty climbed 191.95 points or 1.23 per cent to end at 15,824.05.
Shrikant Chauhan, Executive Vice President, Equity Technical Research at Kotak Securities:
“The market witnessed a strong pullback rally on the weekly closing day after witnessing a sharp decline in the last three sessions. Today, after a strong gap, the opening indices maintained a strong momentum throughout the day.
After strong intraday first hour activity, the index consolidated in the range of 15750-15825/52600-5280 levels and finally closed near the day’s high which is broadly positive for the bulls. Among sectors, the metal index was the biggest gainer and rose over 3 per cent, with a strong formation indicating further upside from current levels.
We believe that 15750/52600 and 15700/52400 levels will act as important support levels for Nifty/Sensex. Above this, the pullback rally is likely to continue towards 15880-15920/53200-53400 levels. On the other hand, below 15700/52400, the uptrend formation will be weak.”
According to exchange data, foreign institutional investors were net sellers in the capital market on July 21 as they offloaded shares worth Rs 2,834.96 crore. Global oil benchmark Brent crude futures rose $0.98 to $72.94 a barrel.