Rupee Rises 6 Paise To Settles Higher At 74.28 Against Dollar Amid Gains In Domestic Equities

Rupee Vs Dollar Today: The rupee settled at 74.28 against the dollar

Extending gains for the second straight session, the rupee rose by six paise against the US dollar on Tuesday, August 3, to settle at 74.28 driven by sharp gains in domestic equities and a weaker American currency. At the interbank foreign exchange market, the domestic unit opened at 74.36 against the dollar and registered an intra-day high of 74.21. It witnessed a low of 74.36. In an early trade session, the local unit opened on a flat note, inching one paise higher to 74.33 against the greenback. The rupee closed at 74.28 against the dollar, registering a rise of six paise over its previous close.

On Monday, August 2, the domestic currency settled at 74.34 against the dollar. According to forex dealers, the local unit is moving in a narrow range ahead of the Reserve Bank of India’s (RBI) policy statement and the release of the US non-farm payrolls data on Friday – August 6. 

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.07 per cent to 91.98.

”Globally, a weaker than expected US manufacturing data and concerns over delta variant spread have raised fears for a pause in US economic recovery and thereby pushed Treasury yields lower to 1.151 per cent levels. So far supply chains continue to struggle to respond to strong demand due to difficulties in hiring & retaining labour and thus impacting overall growth. Probably, the jobs report due Friday will provide an update on any labour market recovery and further clues on the Fed’s next steps.

Domestically, India’s manufacturing activities grew at the strongest pace in the last three months suggesting a back on track economy. However, investors choose to await RBI’s monetary policy scheduled on August 6 for supporting evidence for the same.

So far rupee has been relatively resilient on the back of IPO-related inflows despite lingering Delta variant concerns. But the bottom seems to form near 74.20 levels that the pair have respected in the past few sessions. As long as this support is holding, we can expect the bounce back towards 74.80-90 levels,” said Mr Amit Pabari, MD, CR Forex.

Domestic Equity Markets Today:

On the domestic equity market front, the BSE Sensex ended 872.73 points or 1.65 per cent higher at 53,823.36, while the broader NSE Nifty climbed 245.60 points or 1.55 per cent to 16,130.75. During the session today, the Nifty 50 index – moved beyond its psychological level of 16,000 for the first time ever as economic indicators pointed towards a faster pace of economic revival.

“Markets touching all time high is a combination of various factors including global liquidity, decent operational performance, multiple sectors and various government support schemes. However, one should not get carried away by the buoyancy in the markets as some signs of stress are visible too.

Most notable among them are the high provisions done by most banks in Q1FY22. So a sensible strategy is to focus on segments in the markets which are facing genuine tailwinds and are still available at reasonable prices,” said Ronak Gala, Fund Manager, AlphaQuest by Tarrakki (a leading wealth tech startup).

“Benchmark indices registered fresh record highs while the Nifty closed above 16000-mark. The intraday rally was largely supported by Hdfc Ltd, Titan, and IndusInd bank, which gained over 3 percent.

Technically, on daily charts after a long time the index has formed a strong breakout formation which is broadly positive for the market. The strong bullish candle on daily charts clearly suggests further uptrend from current levels. For the breakout traders, the 16050-16020 levels would be the sacrosanct level to watch out,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

Meanwhile, according to exchange data, the foreign institutional investors were net sellers in the capital market on August 2 as they offloaded shares worth Rs 1,539.88 crore. Brent crude futures, the global oil benchmark, rose 0.80 per cent to $ 73.47 per barrel.