The rupee gained 19 paise to close at 74.68 against the US dollar on Tuesday, supported by foreign capital inflows into local IPOs amid a lacklustre trend in the domestic equity market.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

At the interbank forex market, the domestic unit opened at 74.83 against the greenback and witnessed an intra-day high of 74.66 and a low of 74.86 during the day's trade. It finally ended at 74.68 a dollar.

 

See Zee Business Live TV Streaming Below:

On Monday, the rupee had settled at 74.87 against the US dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.06 per cent to 93.94.

"After two days of lacklustre movements, the rupee has appreciated quarter percentage points backed by inflows from IPOs. While overseas markets traded sideways ahead of the US Fed and Bank of England policy meeting this week," said Dilip Parmar, Research Analyst, HDFC Securities.

Dollar supply remained high on the back of IPOs, while traders may remain light in holiday truncated weeks, Parmar said, adding "Spot USD/INR is expected to trade in a tight range of 74.50 to 75".

On the domestic equity market front, the BSE Sensex fell 109.40 points or 1.18 per cent to end at 60,029.06, while the broader NSE Nifty declined 40.70 points or 0.23 per cent to 17,888.95.

"Rupee traded strongly near 74.70 amid dollar weakness and Crude price holding below USD 85.00. Strong vaccine numbers in India give economic support keeping the rupee fall limited. Going ahead rupee can be seen in the range of 74.50-75.10," said Jateen Trivedi, Senior Research Analyst at LKP Securities.

Brent crude futures, the global oil benchmark, rose 0.27 per cent to USD 84.94 per barrel.

According to Sriram Iyer, Senior Research Analyst at Reliance Securities the rupee appreciated against the US dollar supported by continued foreign inflows into local IPOs.

Foreign institutional investors were net sellers in the capital market on Monday, as they offloaded shares worth Rs 202.13 crore, as per exchange data.

Meanwhile, traders will also be eyeing the US Fed's policy decision on Wednesday.

"A Fed taper is priced in, the market will like to know more on the commentary from the US Fed Chair Jerome Powell."

"Technically, the USD/INR Spot pair ended below 21-Daily Moving Average at 74.785 levels, and another sustained trade below could pull the pair to the support zones at 74.66-74.50. A trade above could push the pair back to the Resistance zones at 74.88-75.10 levels," Iyer said.