The rupee rose 16 paise to close at 74.46 (provisional) against the US dollar on Tuesday (November 17) after an improved demand for riskier assets after positive news on the coronavirus vaccine. At the interbank foreign exchange market, the rupee rose 22 paise to 74.40 against US dollar in early trade. Besides, a weak dollar overseas also supported the local unit. The domestic unit opened strong at 74.43 against the US dollar and later touched a high of 74.38 in day trade. The rupee finally closed at 74.46 against the US dollar, registering a gain of 16 paise over its previous close. On Friday (November 13), the rupee had settled at 74.62 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, dropped 0.24 per cent to 92.41. US-based biotechnology giant Moderna announced on Monday (November 16), that its COVID-19 vaccine has shown to be 94.5 per cent effective in preventing the infection. Cambridge, Massachusetts-based Moderna’s announcement comes just a week after Pfizer and BioNtech said their COVID-19 vaccine candidate was found to be more than 90 per cent effective in preventing COVID-19 in participants.
“Rupee saw some weakness as RBI bought dollar in spot and then undertook sell/buy swap in forward to neutralize rupee liquidity. The apex bank through nationalized banks were seen buying dollar in spot market at around Rs 74.40 mark levels today to keep rupee from appreciating due to inflows into local stocks and weak dollar owing to news of another promising vaccine,” said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.
On the domestic equity market front, the BSE index settled 314.73 points to close at a record high of 43,952.71, and the NSE Nifty surged 93.95 points to 12,874.20. Brent crude futures, the global oil benchmark, rose 0.18 per cent to USD 43.90 per barrel.
”For the week we expect a range of 73.90-74.90. USDINR has again respected it’s technical level around 74.95. The Rupee overvaluation (as measured by 36 country REER) has corrected by 3.5 per cent since the beginning of October on account of relentless Dollar buying by the RBI”, said Mr. Abhishek Goenka, Founder and CEO, IFA Global.