Finance
The rupee remained range-bound on Thursday, ending 2 paise higher at 83.26 vs the US dollar, as the American currency fell from its recent highs after the US Federal Reserve appeared dovish in its policy meeting.
Forex traders said the local currency was supported by strong domestic equity markets and risk-on sentiment. The US Federal Reserve held interest rates steady, and Chairman Jerome Powell appeared satisfied with the economy’s gentle landing. The dollar index dipped after the decision, and the 10-year bond yield decreased to 4.70 percent.
The rupee opened at 83.23 versus the US dollar on the interbank foreign exchange and eventually finished at 83.26, a 2 paise increase over its previous level.
During the day, the rupee traded in a range-bound fashion, reaching a high of 83.19 and a low of 83.27 against the US dollar.
On Wednesday, the rupee settled at 83.28 against the US dollar and had hit an all-time low level of 83.35 against the American currency during intra-day. “After Fed dovishness, US dollar was still well bid against the rupee as ECB (External Commercial Borrowing) payments continued along with oil bids and FPI outflows. Dollar index fell to 106.20 while Asian currencies also gained.
“The US 10-year bond yield was also down since morning after falling about 20 bps yesterday. Meanwhile, Indian equities surged ahead by 0.8 per cent on risk on sentiments,” Anil Kumar Bhansali Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
Furthermore, Bhansali predicted that the rupee would continue in the 83-83.35 level. Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, was trading 0.65% lower at 106.18.
Brent crude futures increased 1.43 percent to USD 85.84 per barrel, the global oil benchmark. The BSE Sensex closed 489.57 points, or 0.77 percent higher, at 64,080.90 points in the domestic equity market. The NSE Nifty rose 144.10 points, or 0.76 percent, to 19,133.25 points.
According to exchange data, foreign portfolio investors (FPIs) were net sellers in the capital markets on Wednesday, selling shares worth Rs 1,816.91 crore.
Source:FE
