Finance
On Tuesday, the rupee recovered from all-time lows to close for the day higher by 19 paise at 82.94 (provisional) against the US dollar, as the American currency retreated from its high levels.Forex traders stated the rupee strengthened when the US dollar fell. Foreign investor selling pressure, combined with risk aversion in global markets, dampened confidence.
The local currency opened at 83.07 versus the US dollar on the interbank foreign exchange market and traded in a range of 82.93 to 83.09 during the day. The rupee eventually finished at 82.94 (provisional) paise higher than the previous close. On Monday, the rupee fell 3 paise to an all-time low of 83.13 against the US dollar. The Indian rupee appreciated on the weak US dollar and positive domestic markets.
The decline in crude oil prices also supported the rupee, while selling pressure by foreign investors capped sharp gains, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.The US dollar declined on positive Asian and European markets and strong euro and pound.”We do not see any sharp appreciation in the rupee as we expect the US dollar to recover amid the hawkish tone of the US Federal Reserve and continued selling pressure from FIIs,” Choudhary said.
However, a rise in risk appetite in global markets may support rupee at lower levels. US 10-year treasury yields rose to the highest levels since November 2007 on expectations of higher interest rates. “Investors may remain cautious ahead of the BRICS summit and Fed Chair, Jerome Powell’s speech at Jackson Hole Symposium this week. USDINR spot price is expected to trade in a range of Rs 82.70 to Rs 83.30,” Choudhary added.
Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, dropped 0.16 percent to 103.13.Brent crude futures fell 0.51 percent to USD 84.03 a barrel, the global oil benchmark. The BSE Sensex closed 3.94 points, or 0.01 percent, higher at 65,220.03 on the domestic equity market. The NSE Nifty gained 2.85 points, or 0.01 percent, to 19,396.45.According to exchange data, foreign institutional investors (FIIs) were net sellers in the capital markets on Monday, offloading shares worth Rs 1,901.10 crore.
Source:FE
