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Rupee Moves Higher To 73.76 Against Dollar

Mumbai:

Snapping a two-session losing streak, the rupee strengthened by 10 paise to close at 73.76 against the US dollar on Wednesday, supported by macroeconomic data and positive domestic equities. At the interbank forex market, the domestic unit opened strong at 73.81 and shuttled between a high of 73.69 and a low of 73.86 against the greenback. It finished at 73.76 for the day, registering a gain of 10 paise over its previous close of 73.86.

According to Devarsh Vakil, deputy head retail research at HDFC Securities, better-than-expected current account data helped the rupee outperform amongst its Asian currency peers.

The country’s current account surplus rose to $19.8 billion – or 3.9 per cent of GDP – in the quarter ended June 30, RBI data showed.

The current account surplus stood at $0.6 billion or 0.1 per cent of GDP in the March quarter, whereas there was a current account deficit of $15 billion or 2.1 per cent of GDP in the year-ago period.

“In the first US presidential election debate, clearly Donald Trump underperformed and the outcome has been in line with what market had expected. The Democratic nominee (Joe) Biden is still leading.”

“Also, there were no fireworks as such from the debate so we didn”t see much reaction on USD-INR spot,” said Rahul Gupta, head of research-currency at Emkay Global Financial Services.

Mr Gupta further said that “now again the market will focus on the US fiscal stimulus package, and it seems that a delay in rolling out could be witnessed. So until this package is passed, we expect USD-INR spot to remain afloat, with crucial support being around 73.40 with 74 acting as a strong resistance.”

During the first of the three presidential debates between US President Donald Trump and his Democratic challenger Joe Biden, the two contenders clashed over each other’s personality, past record, family and their visions.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, firmed up 0.08 per cent to 93.96.

On the domestic equity market front, the 30-share BSE benchmark Sensex ended 94.71 points or 0.25 per cent higher at 38,067.93.

The broader NSE Nifty rose 25.15 points or 0.22 per cent to finish at 11,247.55.

Foreign institutional investors were net sellers in the capital markets, offloading shares worth Rs 1,456.66 crore on Tuesday, according to exchange data.

Brent crude futures, the global oil benchmark, fell 0.49 per cent to $40.83 per barrel.

“The USD-INR has been trading sideways for the last few days, taking support at 73.5 levels and resistance at 73.8. Usually when an entity is choppy in nature, it generally awaits cues, both technical and fundamental, to guide it towards a definite trend,” said Siddharth Kothari, chief investment strategist, Om Kothari Group.

Traders said focus will shift back to economic data.

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