Home Business Rupee Edges Lower By 19 Paise To Settle At 73.02 Against Dollar

Rupee Edges Lower By 19 Paise To Settle At 73.02 Against Dollar


Rupee Edges Lower To Settle At 73.02 Against Dollar Amid Risk Aversion In Global Markets

Rupee Vs Dollar Today: The rupee settled at 73.02 against the dollar

The rupee depreciated by 19 paise against the US dollar on Friday, March 5, to settle at 73.02 due to stronger American currency and risk aversion in the global markets. At the interbank foreign exchange market, the domestic unit opened at 72.98 against the dollar having swung between 72.73 – 73.09 during the day. In an early trade session, the local unit declined 16 paise to 72.99 against the dollar amid muted opening in domestic equities, which weighed on investor sentiment. The rupee finally settled at 73.02 against the dollar, registering a fall of 19 paise over its previous closing. 

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.35 per cent to 91.95. The rupee witnessed a volatile session throughout the week. On Thursday, the domestic unit settled at 72.83 against the greenback. On Wednesday, March 3, the domestic unit surged 65 paise to 72.72 against the dollar due to positive domestic equities. On Tuesday, March 2, the rupee gained 18 paise to 73.37 tracking domestic equities supported by better risk appetite. Whereas, on Monday, March 1, the local unit edged lower by eight paise to 73.55 tracking a hike in global crude oil prices. According to forex traders, the domestic unit plunged due to rising crude oil prices.

“US Dollar gained strength amid surge in bond yields. US treasury yields jumped on expectation that rollout of COVID-19 vaccines and government stimulus efforts will accelerate economic growth and inflation,” said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

”Further, US Federal Reserve Chairman Jerome Powell reiterated banks intention to keep easy monetary policies but failed to express concern about recent rise in yields,” he added.

“The forex market is very volatile, and the short-term trading range has shifted to 72.50-73.50. The speculation that reopening of economies, along with additional fiscal stimulus will increase inflation and the Fed will have to begin tapering at earliest is activating the dollar bulls. In our view, traders are prematurely betting for Fed rate hike and an actual discussion will begin in late 2021,” said Rahul Gupta, Head Of Research, Currency, Emkay Global Financial Services

”Now, the immediate focus is on tonight’s US NFP data, only a dismal figure may spark concerns for America’s ability to recover and weigh on dollar. So for next week, we expect the spot to trade within 72.50-73.50 with a sideways bias,” he added.

On the domestic equity market front, the BSE Sensex ended 440.76 points or 0.87 per cent lower at 50,405.32, while the broader NSE Nifty slipped by 142.65 points or 0.95 per cent to 14,938.10. ”On the weekly basis, despite the market closed in the positive territory the market mood was sluggish. A substantial jump in the long term treasury yields and upward activity in the dollar index towards 92, resulted in weakness across the globe,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

”In the coming week, we could see, Nifty/Sensex touching minimum 14750/50000 or 14550/49300 levels. On the higher side, 15150/51200 and 15280/51600 would be major hurdles. The focus should be on FMCG and auto companies,” he added.

According to exchange data., the foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 223.11 crore on March 2. Brent crude futures, the global oil benchmark, gained 2.59 per cent to $ 68.47 per barrel.

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