India Rupee bounced back on Tuesday against the US Dollar in early trade. It was up around 20 paise and was trading around 77.24 against the greenback, PTI reported. The strength was on account of improved sentiments in the domestic equity markets and receding global crude prices.

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Indian stock markets were trading in the green around 12:45 pm on Tuesday. The benchmark indices BSE Sensex and Nifty50 were up nearly 0.5 per cent around this time and were trading at 54,749.27 and 16374 respectively. While, the former was up by 278 points, the latter rose by over 70 points.

Global oil benchmark Brent crude futures fell 1.77 per cent to USD 104.06 per barrel, the PTI report said.

May 27 USDINR Futures were trading at Rs 77.5150 on the NSE around this time, and were down 0.19 per cent or 15 paise from the previous closing price of 77.5575 on Monday.   

Rupee fell to fresh all-time lows on Monday to close at 77.44 dragged by forex outflows, rising US yields. The event was triggered because of growing strength in the US Dollar following the hawkish comments from the Federal Reserve, a Motilal Oswal report noted.

The central bank raised interest rates last week and the US Fed governor mentioned that a couple of rate hikes were on table, the report further said.

“Also major crosses like Euro, Pound and the Japanese Yen remained under pressure as concerns over higher inflation kept haunting their policy actions. Sterling fell to its lowest level since June 2020 after the Bank of England raised interest rates to their highest since 2009 but warned that the economy was at risk of recession,” the report said.

Yesterday, minutes of Bank of Japan policy meeting were released and policy makers at the central bank remained unwavering in their resolve to keep massive monetary stimulus, even as some saw signs of change in the country's low-inflation environment, the Motilal Oswal report said.

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Today, market participants will be keeping an eye on the German economic sentiment and a higher number could support the Euro at lower levels. As far as the rupee is concerned it could trigger after the inflation number that will be released later this week, it further said.

“We expect the USDINR(Spot) to trade sideways with a positive bias and quote in the range of 77.20 and 77.80,” the Motilal Oswal report said.

USDINR Futures Trading Recommendations: Buy EURINR May/Sell JPYINR May USDINR 27th May 2022 Sell 76.50PE

Triggers for today:

Besides, a weak American currency against its global rivals also helped the domestic unit, forex traders said. The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.07 per cent to 103.58.

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