The rupee appreciated for the second session and gained 15 paise against the US dollar on Thursday, July 22, to settle at 74.46 amid positive domestic equities. At the interbank foreign exchange market, the local unit opened at 74.46 against the dollar and registered an intra-day high of 74.33. It witnessed a low of 74.53. The rupee settled at 74.46, higher by 15 paise over its previous close. In an early trade session, the domestic unit gained 18 paise to 74.43 against the greenback.
On Tuesday, July 20, the local unit settled at 74.61 against the American currency. The forex market was closed on Wednesday, July 21 on account of the Eid festival. In the two straight sessions, the domestic currency has appreciated 42 paise against the dollar. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.01 per cent to 92.74.
What analysts say:
Mr Amit Pabari, MD, CR Forex:
”Globally, the dollar index remains consolidated around 92.78 while the yield on US 10-year Treasury increased for the second day to 1.30 per cent, as investors take pause to reassess the impact of the new covid variant on the global economy. Hereon, it will be watchful to see whether the rise in US yields remains sustainable above 1.3 per cent.
In past session, rupee retraced back from its crucial resistance of 74.90 led by dollar selling by exporters. The next major crucial support of the pair remains in the range 74.20-74.40 levels. With consistent flows on account of Zomato IPO’s, the RBI was seen buying dollars around 74.20-45 zone and curbing the rupee’s appreciating move.”
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities:
“Over this year, risk-off events have not been sustained beyond 24-48 hours. The last one was no exception. After a brief sell-off in global equity markets On Monday, the risk-on mood is back strongly. Equity markets are higher and the US dollar index is trading lower. Asian currencies are also gaining ground against the US dollar.
USD INR spot touched an intra-day low of 74.33, the lowest level since 5th July. However, alleged intervention from RBI pulled it back towards 74.47 by close of trading, still down 15 paise for the day.
All eyes on the ECB meeting tonight. Over the near term, USDINR may continue to oscillate within a range of 74.20-74.60, bracketed by RBI’s demand for $ and risk on mood globally.”
Domestic Equity Markets Today:
On the domestic equity market front, the BSE Sensex ended 638.70 points or 1.22 per cent higher at 52,837.21, while the broader NSE Nifty climbed 191.95 points or 1.23 per cent to 15,824.05.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities:
“The market witnessed a robust pullback rally on the weekly expiry day after witnessing a sharp correction in the last three sessions. Today, after a strong gap up, opening indices maintained strong momentum throughout the day.
Post strong intraday first hour activity, the index consolidated in the range of 15750-15825/ 52600-52800 levels and eventually closed near the day’s highest level which is broadly positive for the bulls. Among sectors, the Metal index gained the most and rallied over 3 percent, with strong formation suggesting further upside from current levels.
We are of the view that 15750/ 52600 and 15700/52400 levels would act as crucial support levels for Nifty/ Sensex. Above the same, pullback rally is likely to continue up to 15880-15920/ 53200-53400 levels. On the other side, below 15700/ 52400, the uptrend texture would be vulnerable.”
According to exchange data, the foreign institutional investors were net sellers in the capital market on July 21 as they offloaded shares worth Rs 2,834.96 crore. Brent crude futures, the global oil benchmark, rose 0.98 to $ 72.94 per barrel.