Rupee hits nearly 4-week high of 75 against US dollar

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Mumbai: Rising for the eighth straight session, the rupee on Monday appreciated 3 paise to nearly four-week high of 75 against the US dollar amid a firm trend in domestic equities and rising appetite for riskier assets.

However, a strong US dollar overseas and firm crude oil prices restricted the rupee’s rise.

At the interbank forex market, the local unit opened at 75.15 against the greenback and witnessed an intra-day high of 74.95 and a low of 75.16.

It finally settled at 75, showing a gain of 3 paise against the previous close.

Over the last eight sessions, the domestic currency has gained 132 paise against the greenback.

Trading is likely to remain range-bound this week ahead of the year-end holidays, forex traders said.

According to Dilip Parmar- Research Analyst, HDFC Securities rupee further moved north following strong risk appetite and lacklustre dollar demand ahead of year-end.

Trading volume remains thin as many European markets remain shut and foreign investors are in a holiday mood ahead of the new year.

“The Indian Rupee ended the session marginally stronger against the US Dollar in a choppy trading session as foreign banks’ dollar sales on behalf of exporters offset earlier greenback purchases by state-run banks,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Positive moves in Indian equity indices and stronger Asian currencies also aided sentiments.

However, FPI’s continued to withdraw capital from Indian equities and bonds and fears of a rapid spread of Omicron variant of coronavirus kept the appreciating bias limited.

“Rupee traded muted as the market was range-bound on the back of flat range in the dollar and crude prices due to holiday season,” Jateen Trivedi, Senior Research Analyst at LKP Securities, said.

Crude prices can define the trend for the rupee as market sentiments were spooked due to nervousness on lockdowns due to the rise in cases in many parts of the EU.

“OPEC+ updates in the first week of the new year can push prices higher in the rupee if Crude witnesses sell-off in case of weak demand outlook by OPEC. Going ahead rupee can be seen in the range of 74.75-75.25,” Trivedi said.

On the domestic equity market front, the BSE Sensex ended 295.93 points or 0.52 per cent higher at 57,420.24, while the broader NSE Nifty advanced 82.50 points or 0.49 per cent to 17,086.25.

Meanwhile, the dollar index, which measures the greenback’s strength against the basket of six currencies, rose 0.21 per cent to 96.21.

Brent crude futures, the global oil benchmark, fell 0.01 per cent to USD 76.13 per barrel.

Foreign institutional investors remained net sellers in the capital market on Friday, as they offloaded shares worth Rs 715 crore, as per exchange data.

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