Rupee Gains To 74.25 Against Dollar Amid Heavy Buying In Domestic Equities


Rupee Vs Dollar Today: The rupee settled at 74.25 against the dollar

After extending losses in the past few sessions, the rupee strengthened by 19 paise against the US dollar on Thursday, August 12, to settle at 74.25 (provisional) as heavy buying in domestic equities and weakness in the American currency boosted investor’s sentiments. At the interbank foreign exchange market, the domestic unit opened at 74.26 against the dollar and registered an intra-day high of 74.24. It witnessed a low of 74.33 during the session. In an early trade session, the domestic unit gained 17 paise to 74.27 against the greenback. 

The rupee closed at 74.25 against the American currency, registering a rise of 19 paise compared to its previous close. On Wednesday, August 11, the local unit settled at 74.44 against the dollar. According to forex traders, fresh foreign capital inflows also supported the rupee. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.04 per cent to 92.87.

What analysts say:

Mr Amit Pabari, MD, CR Forex:

”Moving forward, the USDINR pair is likely to further squeeze down its momentum in a range of 74.10-74.90 with an immediate resistance of 74.50. The RBI and importers both got another chance to cover the dollar at lower levels.

However, this could be an opportunity for exporters too as they could preutilize their forwards. Overall, we are expecting that USDINR should trade further in a sideways range before giving a breakout.”

Kshitij Purohit, Lead International & Commodities at CapitalVia Global Research Limited:

”The Reserve Bank of India continues to interfere in currency markets in order to keep the rupee from rising too much. Despite the fact that India’s economic data has improved, the RBI has a clear preference for a stronger USD/INR.

Prices didn’t close below 74.53-74.51 throughout the day and remained consolidating in the range of 74.53-74.61 throughout the day. We can also see a “Bearish RSI Divergence” on intraday charts where prices are making highs of similar level and RSI is making lower highs, indicating towards the lack of strength among buyers.”

Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities:

“USDINR spot closed 18 paise lower at 74.25 after US inflation CPI inflation came in softer than the previous month. Mild weakness in the US Dollar Index caused USDINR to fall towards 74.25 levels on spot.

RBI remains a major buyer of US Dollars and as a result, USDINR may continue to witness a very slow and choppy downtrend with 74.00 as strong support and 74.50/60 as major resistance. Low volatility can offer lucrative shorting opportunities to option short-sellers.”

Domestic Equity Markets Today:

On the domestic equity market front, the BSE Sensex rallied 318.05 points to end at a fresh lifetime high of 54,843.98, while the broader NSE Nifty climbed 82.15 to record 16,364.40. The benchmark indices touched record highs today led by gains in stocks such as ICICI Bank, Tech Mahindra, and Larsen & Toubro.

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities:

“Markets were on a strong footing throughout the session despite weak Asian market cues. After a firm opening, benchmark Nifty soon cleared the intraday resistance of 16300. The broader market activity ratio also improved, as nearly 1450 stocks traded in the green whereas over 300 stocks witnessed selling pressure.

Technically, on daily charts, the index has formed a range breakout formation which suggests a continuation of an uptrend wave in the near future. We are of the view that 16280/16220 would be a key support level for trend-following traders.”

According to exchange data, the foreign institutional investors emerged as net buyers in the capital market on August 11 as they bought shares worth Rs 238.14 crore. Brent crude futures, the global oil benchmark, surged 0.56 per cent to $ 71.84 per barrel.

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