Rupee Closes At 75.78 As Dollar Off 3-Month Low

Rupee Vs Dollar: The rupee is down 6.19% against the dollar so far this year

Rupee Vs Dollar Today: The rupee declined by 29 paise – or 0.38 per cent – to hit 75.88 against the US dollar on Thursday, as the greenback steadied after hitting a three-month low initially following the Federal Reserve’s statement that policy would have to be proactive with rates near zero out to 2022. The rupee moved in a range of 75.73-75.88 during the four-hour session – having started the day weaker at 75.80 compared to its previous close of 75.59 – before shutting shop at 75.78 against the US currency.

Domestic stock markets plunged more than 2 per cent on Thursday amid a selloff across sectors led by financial stocks. The Sensex ended 708.68 points – or 2.07 per cent – lower at 33,538.37, and the Nifty settled at 9,902.00, down 214.15 points – or 2.12 per cent – from its previous close. Both benchmark indices logged their worst closing levels since June 1.

Analysts awaited consumer inflation data due on Friday for more clarity on domestic monetary policy going forward.

Official data on consumer inflation will be released at 5:30 pm on Friday. Consumer inflation – or the rate of increase in retail prices determined by the Consumer Price Index (CPI) – is likely to have moderated to a six-month low of 5.50 per cent in May, according to a poll of 35 economists by news agency Reuters.

Crude oil prices fell more than 2 per cent on worries about slow demand growth with coronavirus cases rising, US crude stockpiles hitting an all-time high and the Federal Reserve projecting recovery from the pandemic would take years. Brent crude futures – the global benchmark for crude oil – fell 2.2 per cent to $40.81 per barrel, giving up all of the gains registered the previous day.

The dollar index – which gauges the greenback’s performance against six currencies – was last seen trading up 0.36 per cent, having earlier declined to a three-month low.

Analysts say the rupee is expected to remain in a narrow range in the near term.

“Seems like current sustained weakness in the dollar should take a pause as safe-heaven assets like gold, Japanese yen and US bonds have picked up strength. This will keep any sharp rupee strength in check and can cap the gains near 75.00 levels,” said Amit Pabari, managing director at forex advisory firm CR Forex Advisors.

“On the other end, 76.00-76.20 region is likely to remain protected amid the current attraction of foreign inflows in the Indian equity market. Hence, the range of 75.00-76.20 levels is likely to remain in place for few more sessions,” he said. 

Currency markets currently operate within reduced trading hours due to the coronavirus-induced lockdown. The temporary timings are from 10 am to 2 pm, instead of the normal timings of 9 am to 5 pm.

At the current level, the rupee is down 6.19 per cent against the dollar so far this year.

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