The rupee rose 27 paise to settle at 74.19 (provisional) against the US dollar on Wednesday (November 18) for the third session in a row, supported by gains in domestic equities and weak American currency. At the interbank foreign exchange market, the rupee opened at 74.49 against the dollar, then gained ground and touched 74.44 against the American currency. The domestic unit touched an intra-day high of 74.09 and a low of 74.52. It finally closed at 74.19 against the greenback, registering a rise of 27 paise over its previous close. On Tuesday, the rupee settled 16 paise higher, closing at 74.46 against the dollar.
Forex traders claimed that weakness in the US dollar against its key rivals and significant foreign fund inflows boosted the investor sentiment. The dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.21 per cent to 92.22. On the domestic equity market front, the BSE index zoomed 227 points to close at 44,180. NSE Nifty surged to close at 12,938.
”Rupee has remained comparatively immune to the updates especially post US elections and seems undervalued with respect to its peers as RBI has strongly intervened. The resilience of the pair throughout and RBI’s intervention shall halt the near term losses close 75.00 levels and the gains might also be limited to 73.80 levels for a while,” said CR Forex Advisors MD Amit Pabari.
”Overall, the broad range for the pair remains within 73.00-75.00, and hence on a broader note, upticks between 74.50-74.80 can be taken for selling and to buy, one can look for 73.00-73.50 levels,” he added.
According to provisional exchange data, the foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 4,905.35 crore on Tuesday. Brent crude futures, the global oil benchmark, rose 1.01 per cent to USD 44.19 per barrel.
“The dollar slipped as rising COVID-19 cases in the US forced local authorities to impose fresh restrictions to curb the outbreak. US Federal Reserve Chair Jerome Powell warned that surge in COVID-19 cases poses risk to the economy and would require more support from Federal Reserve and Government,” said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.