Rupee darts up 20 paise to 76.30 against US dollar

Mumbai: Snapping its four-day losing streak, the rupee appreciated by 20 paise to settle at 76.30 against the US dollar on Wednesday, tracking a weak greenback overseas and recovery in domestic equities.

However, unabated foreign fund outflows capped the gains.

At the interbank forex market, the domestic unit opened at 76.41 against the US dollar and touched an intra-day high of 76.16 and a low of 76.52.

It finally finished at 76.30, registering a rise of 20 paise over its previous close.

“The rupee is currently trading slightly higher today on overnight decline in crude oil prices and positive domestic equity markets. Softer US Dollar is also supporting rupee,” said Praveen Singh, AVP- Fundamental currencies and Commodities analyst, Sharekhan by BNP Paribas.

Singh further said, “We expect Indian Rupee to decline again from higher levels as overall sentiments remain negative for Rupee. Geopolitical tensions due to tensions between Russia and Ukraine may again put downside pressure on the Rupee.”

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.60 per cent lower at 100.35.

“The US Dollar is also expected to recover from lower levels as hawkish Federal Reserve and elevated US bond yields may continue to support the greenback,” Singh said.

On the domestic equity market front, the 30-share BSE Sensex ended 574.35 points or 1.02 per cent higher at 57,037.50, while the broader NSE Nifty surged 177.90 points or 1.05 per cent to 17,136.55.

Brent crude futures, the global oil benchmark, inched up 0.76 per cent to USD 108.06 per barrel.

Foreign institutional investors continued their selling spree and offloaded shares worth a net Rs 3,009.26 crore on Wednesday, as per stock exchange data.

According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee appreciated against the US dollar on Wednesday following gains in local equities and a fall in the dollar and US bond yields.

Most major equity markets in Asia, except China and Hong Kong, rose, while regional currencies were mixed against the greenback.

The dollar and US bond yields fell as most investors await the final public statement from Fed Chair Jerome Powell. Traders will closely watch for any hints regarding future monetary policy.

“Rupee traded strongly near 76.30 compared to 76.50 previously amid weakness in Crude and Commodities across the board. The rupee has been volatile in a range of 76.25-76.60 either side break can give a fresh rally. A break above 76.20 will see a sharp rise toward 76.00,” said Jateen Trivedi, Senior Research Analyst at LKP Securities.