Rupee surges 19 paise to 72.77 against USD

Mumbai: The rupee strengthened by 19 paise to end at 72.77 against the US dollar on Tuesday, tracking weakness in the American currency in the overseas market.
At the interbank forex market, the local unit opened at 72.85 against the greenback and witnessed an intra-day high of 72.75 and a low of 72.87.
It finally ended at 72.77 against the American currency, registering a rise of 19 paise over its previous close.
On Monday, the rupee had settled at 72.96.
“The Indian Rupee appreciated on the back of weakness in dollar. Dollar slipped amid decline in US treasury yields, rise in risk appetite in the global markets and expectation of poor economic data from the US.
“Expectation of strong global economic growth supported risky currencies,” said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.26 per cent to 89.61.
Rupee may trade in the range of 72.60 to 73.50 in next couple of sessions, Mukadam added.
Brent crude futures, the global oil benchmark, fell 0.50 per cent to USD 68.12 per barrel.
On the domestic equity market front, the BSE Sensex ended 14.37 points or 0.03 per cent lower at 50,637.53, while the broader NSE Nifty advanced 10.75 points or 0.07 per cent to 15,208.45.
Foreign institutional investors were net buyers in the capital market on Monday as they purchased shares worth Rs 585.36 crore, as per exchange data.
Further, the rupee gained strength as daily COVID-19 cases declined, traders said.
The daily count of COVID-19 cases in the country fell below the 2-lakh mark after over a month at 1,96,427, while the death toll also slipped to the lowest in 21 days at 3,511, according to the Union Health Ministry data updated on Tuesday.
“The Indian rupee appreciated 19 paise to 72.77 a dollar following weaker dollar and Asian currencies. Most of the Asian currencies traded higher taking cues from Chinese currency which hit its strongest level against the dollar in three years,” said Dilip Parmar, Research Analyst, HDFC Securities.
With Tuesday’s gain, rupee has approached its March highs as a slowdown in coronavirus infections gives hope for opening of economy.
The broad-based dollar index drifted lower after Fed officials made it clear the US central bank will look through what they expect to be a transitory inflation spike, Parmar noted.
Technically, spot USD-INR has support at 72.27 and resistance at 73.34, with near term bias remaining on downside, he added.
According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee appreciated against the US dollar tracking losses on the dollar index after fresh assertion from Federal Reserve officials that policy would stay on hold calmed investor fears about inflation forcing interest rates higher.
Lack of Reserve Bank of India’s presence in the market also helped the currency, Iyer added.
Other Asian peers also received a boost from the fall in the dollar index and US Treasury yields and lent support to the domestic unit. The onshore Chinese Yuan reached 6.4016 to the dollar, its highest level since June 2018.

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