Rupee darts up 12 paise to 72.75 against US dollar

·3-min read

Mumbai, Feb 12 (PTI) The rupee gained 12 paise to finish at 72.75 against the US dollar on Friday, propped up by sustained foreign capital inflows and softening crude oil prices.

At the interbank forex market, the local unit opened at 72.79 against the greenback and witnessed an intra-day high of 72.75 and a low of 72.83.

It finally ended at 72.75 against the American currency, registering a rise of 12 paise from its previous close.

On Thursday, the rupee had finished at 72.87.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.20 per cent to 90.60.

'Indian Rupee gained strength amid softening of crude oil prices and steady FII inflows. Additionally, expectation of improved macro-economic data supported rupee,' said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

Market participants will be keeping an eye on inflation and industrial production numbers and better-than-estimate numbers could extend gains for the currency, forex traders said.

'India CPI data is likely to show that inflation eased and remained under RBI target range of 2-6 per cent in January 2020. However, sharp gains were prevented on strong Dollar. Rupee may trade in the range of 72.50 to 73.20 in next couple of sessions,' Mukadam added.

On the domestic equity market front, the BSE Sensex ended 12.78 points or 0.02 per cent higher at 51,544.30, while the broader NSE Nifty fell 10 points or 0.07 per cent to 15,163.30.

Foreign institutional investors remained net buyers in the capital market as they purchased shares worth Rs 944.36 crore on Thursday, according to exchange data.

Brent crude futures, the global oil benchmark, slipped 0.64 per cent to USD 60.75 per barrel.

On a weekly basis, the rupee gained 18 paise against the American currency.

'The Indian Rupee appreciated on Friday and strengthened this week against the US Dollar supported by equity inflows. However, persistent intervention throughout the week by the Reserve Bank of India capped the currency's appreciation,' said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Meanwhile, a weak dollar index has also helped the local unit this week.

'The rupee was also aided by a decline in the dollar index. The gauge is down 0.5 per cent so far this week. The greenback did recover some of its losses this Friday, however the upbeat risk mood, supported by the likelihood of more fiscal stimulus in the US, kept the dollar weak this week,' Iyer noted.

In the domestic markets, investors will await the local inflation and IIP data due post market hours on Friday.

According to Rahul Gupta, Head Of Research-Currency, Emkay Global Financial Services, global market sentiments are optimistic with world stocks hovering just near records highs on hopes that a USD 1.9 trillion COVID-19 aid package will be passed by US policymakers as soon as this month just as coronavirus vaccines are being rolled out globally.

'Good risk appetite coupled with inflows into local stocks will help Indian Rupee to appreciate, but likely RBI intervention at around 75.70-72.60 zone may limit the fall in USD-INR pair,' Gupta noted.

Gupta further said 'we expect USD-INR Spot to trade sideways... with 72.65/72.50 being key support zone below which next support is at 72.30. On the upside, 73.0-73.15-73.25 will act as the crucial resistance levels.' PTI DRR ABM ABM