Finance
The rupee gains early on Thursday as the dollar took a breather ahead of the key US Federal Reserve meeting in Jackson Hole, Wyoming, and as capital inflows remained strong.
According to PTI, the Indian rupee rose 6 paise to 79.80 against the US dollar in early trade.
According to PTI, the domestic unit opened at 79.80 against the dollar on the interbank foreign exchange, up 6 paise from its previous close of 79.86.
According to Bloomberg, the rupee was last changing hands at 79.8250 per dollar, up from its previous close of 79.8150.
In addition to the domestic currency, there has been a significant inflow of foreign capital into Indian assets.
According to the most recent National Securities Depository data, foreign portfolio investors have invested over 50,000 crore in Indian equities since July.
In contrast, as a result of lower risk aversion, the dollar index fell to near 108.40, while Asian currencies gained 0.2% to 0.5%. On Wednesday, Asian stocks rose after the S&P 500 Index ended a three-day losing streak.
Domestic equities gained for the third session in a row and were on track for weekly gains for the sixth week in a row.
Both equity benchmarks ended Wednesday with marginal gains, extending their winning streak to the second consecutive day.
On Thursday, a basket of global currencies showed the US dollar edging back from a two-decade high as investors awaited Fed Chair Jerome Powell’s speech the following day for new information on the direction of monetary policy.
Meanwhile, oil prices rose slightly in Asian trading, with Brent crude futures approaching $102 per barrel. The benchmark is now more than $10 higher than it was last week.
According to a note from BofA Securities, high commodity prices will keep the rupee under pressure.
The rupee “should do marginally well” at the open, tracking Asian cues, but oil “will ensure there isn’t much upside,” according to a trader at a Mumbai-based bank.
This week, the rupee has remained range bound, trading in a 20-paisa band. Trading in other Asian currencies, on the other hand, has been highly erratic as a result of the Chinese central bank’s policy easing and expectations that the Fed will keep interest rates high for an extended period of time.
“It is clear from recent rupee price action that there is currently no appetite to take it below 80,” the trader said.
Investors will now pay close attention to Fed Chair Jerome Powell’s speech at an annual event in Jackson Hole, Wyoming, on Friday to determine the frequency of upcoming interest rate increases.
Source:Reuters
