Rupee recovers 12 paise to close at 74.96 as crude oil eases

On Monday, the rupee had declined by 18 paise to close at 75.08 against the U.S. currency.   | Photo Credit:

The rupee snapped its two-session losing streak to settle 12 paise higher at 74.96 against the U.S. dollar on Tuesday, tracking a positive trend in domestic equities and losses in crude oil prices.

A weaker greenback against major global rivals and easing U.S. Treasury yields also supported the local unit, analysts said.

At the interbank forex market, the rupee opened higher at 75.05 against the greenback and later witnessed an intra-day high of 74.95 and a low of 75.17. It finally ended at 74.96 against the American currency.

On Monday, the rupee had declined by 18 paise to close at 75.08 against the U.S. currency.

Sriram Iyer, Senior Research Analyst at Reliance Securities, stated that the rupee appreciated due to broad advances in regional equities and currencies. Easing crude oil prices and U.S. Treasury yields during the European trading session also helped the local unit.

"Additionally, fund flows will continue into the initial public offerings this week and that has supported the rupee over the last few trading sessions," Mr. Iyer said, adding that Asian and most of the emerging market currencies were trading higher on Tuesday and lent support.

However, dollar demand from state-run banks, likely on behalf of importers, capped large gains in the local unit.

"Rupee consolidated in a narrow range in the first hour of the session but rose sharply on back of gains in domestic equities and retracement in the dollar against its major crosses," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Market participants remain cautious ahead of the important fiscal balance numbers that will be released on the domestic front.

Mr. Somaiyaa further said that on the global front, focus will be on the U.S. consumer confidence number and a better-than-expected number could extend gains for the dollar.

"We expect the USDINR(Spot) to trade sideways and quote in the range of 74.70 and 75.20," Mr. Somaiyaa said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.01% to 93.80.

On the domestic equity market front, the BSE Sensex ended 383.21 points or 0.63% higher at 61,350.26, while the broader NSE Nifty advanced 143 points or 0.79% to close at 18,268.40.

Brent crude futures, the global oil benchmark, fell 0.40% to $85.65 per barrel.

Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth ₹2,459.10 crore, as per exchange data.

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Printable version | Dec 1, 2021 9:58:23 AM |

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