Continuing its winning streak for the third session, the rupee appreciated nine paise against the US dollar on Tuesday, July 13, to settle at 74.49, tracking gains on foreign fund inflows and positive domestic equities. At the interbank forex market, the domestic unit opened higher at 74.49 against the dollar and witnessed an intra-day high of 74.41. It witnessed a low of 74.50 during the session. In an early trade session, the local unit gained 11 paise to 74.47 against the greenback. On Monday, July 12, the domestic unit settled at 74.58 against the American currency.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.11 per cent to 92.36. In the last three trading sessions, the domestic currency has appreciated by 22 paise. According to forex dealers, firm crude oil prices capped the gains in the local currency today.
On the domestic macro-economic front, the local unit also gained after the government released the retail inflation data on Monday. Retail inflation remained above the Reserve Bank of India’s comfort zone for the second consecutive month in June 2021.
What analysts say:
Mr Amit Pabari, MC, CR Forex:
”Broadly, the USDINR pair is expected to trade in the sideways zone range of 74.20 to 74.90 for few more weeks. The positives for the rupee could be only IPO, but the weight that is heavier as after Rs. 80,000 crore worth of issues in July, now LIC and Paytm is going to hit the market soon.
The negatives for rupee are a stronger US dollar, higher crude oil prices, weaker domestic fundamentals, and expectation of a higher fiscal deficit. Overall, tug of war likely to continue between positives and negatives until the USDINR pair breaks 74.90 over the medium term to set 75.20-75.50 targets.”
Kshitij Purohit, Lead International & Commodities at CapitalVia Global Research Limited:
”Technically, the USDINR July opened on a negative note and has made a “Bullish Pin Bar” candlestick pattern on daily charts. Prices have again faced challenges in closing above the resistance zone of 74.82-74.84.
On intraday charts, prices were moving in a marginally sideways to bullish trend and has covered the gap which was created due to gap-down opening.
If the same momentum continues, we may see price testing resistance in the range of 74.97-75.00. On the contrary, if prices face challenges in crossing 74.82-74.85 zone, we may see a downfall till 74.60-74.58 zone, which is the next immediate support area.”
Domestic Equity Markets Today:
On the domestic equity market front, the BSE Sensex ended 397.04 points or 0.76 per cent higher at 52,769.73, while the broader NSE Nifty climbed 119.75 points or 0.76 per cent to 15,812.35. The equity benchmarks moved higher today led by gains in HDFC, ICICI Bank, HDFC Bank, Axis Bank, Reliance Industries, and Kotak Mahindra Bank.
According to exchange data, the foreign institutional investors were net sellers in the capital market on July 12 as they offloaded shares worth Rs 745.97 crore. Global oil benchmark Brent crude futures advanced 0.55 per cent to $ 75.57 per barrel.