Rupee Snaps 2-Day Winning Streak, Settles Lower To 73.91 Against Dollar

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Rupee Snaps 2-Day Winning Streak, Settles Lower To 73.91 Against Dollar

Rupee Vs Dollar Today: The rupee settled at 73.91 against the dollar

The rupee snapped its two-day winning streak today and edged lower by six paise against the US dollar on Wednesday, May 5, to settle at 73.91 (provisional) amid concerns over the ongoing second wave of COVID-19 in the country. At the interbank foreign exchange market, the local unit opened higher at 73.80, having swung between 73.80 and 74.04 per dollar throughout the session. In an early trade session, the domestic unit gained five paise to 73.80 against the greenback. However, it failed to sustain ground and slipped to 74.04, to close at 73.91 registering a loss of six paise over its previous close.

On Tuesday, May 4, the local unit settled at 73.85 against the dollar. The rupee gained 24 paise in the previous two sessions. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.02 per cent to 91.30. A forex dealer said that the rally in domestic equities restricted the rupee’s fall today.

”The spot is hovering around 74 zone, the Covid related worries are keeping it afloat. But the influential dovish cover is putting pressure on the spot. All eyes are on the US NFP data and it is anticipated to show the US economy adding 950K jobs in April, a better data may establish an uptrend in USDINR spot. So up until then, we expect USDINR spot to continue trading sideways in between 73.50 and 74.25,” Mr. Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services. 

”Rupee opened at 73.83  and made a low of 73.79 where nationalized banks where standing firmly and did not allow a breach of 73.79 and then took it to as high as 74.04 before again a sell-off brought it down to 73.90 levels….Tomorrow expect rupee to move in a range of 73.70 to 74.10 with no fresh data or events,” said Mr. Anil Kumar Bhansali, Partner and Head of Treasury, Finrex.

”The rupee has strengthened due to thin market conditions and a lack of dollar buying interest in the market. A large amount of dollar selling interest from exporters and IT companies allowed the rupee’s uptrend to continue for a while. The depreciation of forwarding rupee maturities prompted the aforementioned companies to sell their forward dollars in order to obtain a better exchange rate for those maturities,” said Kshitij Purohit, Lead International Products & Commodities at CapitalVia Global Research Limited.

”Exporters’ dollar selling, higher forward dollar premia levels, and IPO-related inflows all helped to keep the USD/INR downtrend going for a while. The currency pair checked the 73.80 level of support; a break of that level would send the pair to the next level of support at 73.50,” added Mr Purohit.

On the domestic equity market front, the BSE Sensex closed 424.04 points or 0.88 per cent higher at 48,677.55, while the NSE Nifty settled 121.35 points or 0.84 per cent higher at 14,617.85.

”Today’s intraday activity has been lackluster with a momentum of near 130/500 points.  Among sectors, strong buying was seen in Pharma, Bank Nifty index while minor profit booking was seen in selective Reality and financial stocks. Technically, post yesterday’s sharp fall,  today’s market is trading within the yesterday range which clearly indicates indecisiveness between bulls and bears,” said Shrikant Chouhan, Executive Vice President (Equity Technical Research), Kotak Securities.

“Nifty may series is expected to trade with a positive bias. Currently, support is seen at 14400 levels with resistance seen at 14800/14900. Breach of 14400 can result in increase of short-term volatility. Pharma and IT trade with a positive bias while selective value buying opportunities are seen in the BFSI space. Expect an extended phase of consolidation before markets make a directional move,” said Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities

According to exchange data, the foreign institutional investors were net sellers in the capital market on May 4 as they sold shares worth Rs 1,772.37 crore. Brent crude futures, the global oil benchmark, rose 1.36 per cent to $ 69.82 per barrel.

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