The rupee moved in a tight range on Wednesday as Asian currencies moved lower amid firmness in the US dollar. The rupee moved between 75.55 and 75.86 against the US currency during the four-hour session, before shutting shop at 75.79, down 0.20 per cent compared to its previous close. Gains in domestic equity markets however provided some support to the rupee, keeping the downside in check, say analysts. At the current level, the rupee is down 6.21 per cent against the American currency so far this year.
Domestic equity market benchmarks S&P BSE Sensex and NSE Nifty 50 rose more than 1 per cent led by buying interest in financial and consumer goods stocks, after the government said further stimulus measures are not ruled out to aid an economic recovery.
The government and the Reserve Bank of India (RBI) have so far announced support worth Rs 21 lakh crore to fight the economic fallout from the coronavirus pandemic and the weeks-long lockdown.
Analysts expect the rupee to move in a narrow range in the near term as investors assess the effectiveness of measures taken to fight COVID-19.
“The rupee is likely to move within a range of 75.45-75.90. Investors would closely monitor the Virus curve as economies reopen and that would continue to drive global risk sentiment,” said Abhishek Goenka, founder and CEO of forex advisory firm IFA Global.
Crude oil prices held steady on Wednesday despite signs of improving demand and a drawdown in US crude inventories, as concerns over the coronavirus outbreak capped gains.
Brent crude futures – the global benchmark for crude oil – were last seen up 0.3 per cent at $34.75 per barrel.
The dollar index – which gauges the greenback against six peers – rose 0.19 per cent at the strongest level of the day, and was last seen trading up 0.11 per cent.
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.