The rupee edged higher to touch the 74.91 mark against the US dollar on Monday, tracking gains in Asian currencies. It moved in a narrow range between 74.91 and 75.03, having started the week stronger at 74.93 against the greenback compared with Friday’s close of 75.02. Gains in domestic equities on the back of foreign fund inflow and weakness in the dollar overseas supported the rupee, according to analysts.
Equity benchmarks Sensex and Nifty climbed up more than 1 per cent each on Monday, backed by buying interest in financial and IT stocks. Heavyweight HDFC Bank added to last week’s strong earnings releases from IT companies, countering the impact of the surge in domestic coronavirus cases past one million. (Also Read: Analysts Expect Rupee To Stay Near 74 In Near Term)
The rupee appreciated as most Asian currencies moved higher against the US dollar on Monday.
While the Japanese yen was last seen trading 0.20 per cent lower against the dollar, the Chinese yuan was up 0.09 per cent, the South Korean won up 0.15 per cent and the Hong Kong dollar up 0.01 per cent.
The Singapore dollar was flat and the Thai baht was down 0.37 per cent against the US currency at the time.
The dollar index – which measures the greenback against six currencies – fell as much as 0.09 per cent on Monday.
Analysts expect the rupee to stay close to the current levels in the near term.
“We may continue to see the rupee trade in the 74.50-75.50 range if the US dollar remains stable globally. We could see 74.50 get tested again,” said Abhishek Goenka, founder and CEO, IFA Global.
The rupee has recovered 2.46 per cent from a record low of 76.91 logged in April, but is still down 5.13 per cent against the American currency so far this year.