Mumbai, May 20 (PTI) The rupee strengthened by 6 paise to end at 73.12 against the US dollar on Thursday, tracking the weakness in the American currency in the overseas market.
At the interbank forex market, the local unit opened at 73.16 against the greenback and witnessed an intra-day high of 73.09 and a low of 73.17.
It finally ended at 73.12 against the American currency, registering a rise of 6 paise over its previous closing. On Wednesday, the rupee had settled at 73.18 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.09 per cent to 90.10. Brent crude futures, the global oil benchmark, fell 1.91 per cent to USD 65.39 per barrel.
On the domestic equity market front, the BSE Sensex ended 337.78 points or 0.68 per cent lower at 49,564.86, while the broader NSE Nifty declined 124.10 points or 0.83 per cent to 14,906.05.
Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 697.75 crore, as per exchange data.
Meanwhile, with 2,76,110 new coronavirus infections being reported in a day, India's total tally of COVID-19 cases climbed to 2,57,72,440, while the daily deaths were recorded below 4,000 after four days, taking the toll to 2,87,122, according to the Union Health Ministry data updated on Thursday 'The Indian Rupee appreciated marginally against the greenback supported by dollar inflows and weaker dollar. However, gains were capped on importer hedging and the Federal Reserve’s bond taper worries weighed on risk appetite,' said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Meanwhile, most Asian currencies and equities ended weaker and weighed on sentiments.
Technically, the USDINR spot pair could remain in the range 72.90-73.25, Iyer said.
According to Kaynat Chainwala - Fundamental Research Analyst Currencies, Anand Rathi Shares and Stock Brokers, the path to India's economic recovery may not be smooth in the near term considering the challenges posed by resurgence of COVID-19 pandemic in India.
'So, the RBI is likely to continue with its accommodative monetary policy stance in the June meeting to provide much needed support to the economy,' Chainwala said.
Also, expected recovery in the dollar index as Federal Open Market Committee (FOMC) April meeting minutes took the markets by surprise with some Fed showing readiness to discuss tapering if the US economy continues to make progress, may exert pressure.
'Taking all these factors into consideration, Indian Rupee spot may trade with a depreciation bias towards 74 levels in the coming weeks although improving COVID-19 situation may provide a cushion,' Chainwala said. PTI DRR MR