Rupee rises by 17 paise to over 7-week high; gains for 3rd straight day

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Mumbai, May 18 (PTI) The rupee rose by 17 paise to close at a seven-week high of 73.05 against the US dollar on Tuesday, extending its gaining streak to the third straight session on positive domestic equities and weakening of the American currency in the overseas markets.

At the interbank forex market, the rupee opened at 73.18 and hit an intra-day high of 72.95 and a low of 73.18 during the session.

'Rupee gained for the third day in row to the highest in almost seven weeks as dollar drifted lower while equities roared after daily virus cases started declining,' said Dilip Parmar, Research Analyst, HDFC Securities.

However, sharp gains were prevented on surge in crude oil prices, continued FII outflows, traders said.

The local unit settled at 73.05, the highest closing level since March 26. On Monday, the rupee had closed at 73.22 against the US dollar. The domestic unit has appreciated 37 paise in the trading sessions to Tuesday.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.40 per cent to 89.80.

On the domestic equity market front, the BSE Sensex ended 612.60 points or 1.24 per cent higher at 50,193.33, while the broader NSE Nifty advanced 184.95 points or 1.24 per cent to 15,108.10.

Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 2,255.84 crore, as per exchange data.

Brent crude futures, the global oil benchmark, rose 0.86 per cent to USD 70.06 per barrel.

Meanwhile, India's COVID-19 death toll climbed to 2,78,719 with a record 4,329 fresh fatalities, while the single day rise in coronavirus cases stood at 2.63 lakh, the lowest in 28 days, according to the Union Health Ministry data updated on Tuesday.

Sriram Iyer, Senior Research Analyst at Reliance Securities, said the Indian Rupee appreciated on Tuesday against the US dollar tracking the broad dollar weakness, upbeat risk appetite and strong local equities.

'Moreover, the Reserve Bank of India's absence in the spot market also led to exit of dollar longs,' Iyer said.

In the overseas markets, the Dollar Index was trading near multi-month lows amid renewed expectations the United States will not hike interest rates anytime soon.

The rupee had risen to a near two-month high of 72.95 earlier in the session.

'Indian Rupee appreciated on the back of weakness in dollar and surge in domestic markets. Dollar slipped as poor economic data from the US led to expectation that interest rates may stay at ultra-low levels for quite some time and even government will continue with its fiscal stimulus,' said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

Additionally, market participants remained cautious ahead of the Federal Open Market Committee (FOMC) meeting minutes to get hint on future monetary stance. PTI DRR MR