Rupee settles 11 paise higher at 74.91 against US dollar

The rupee appreciated by 11 paise to settle at 74.91 against the US dollar on Monday, tracking positive domestic equities and weak American currency. It finally closed for the day at 74.91 against the American currency, up 11 paise over its previous close. Forex traders said positive opening in domestic equities, weak American currency and foreign fund inflows supported the rupee.

The rupee appreciated by 11 paise to settle at 74.91 against the US dollar on Monday, tracking positive domestic equities and weak American currency. At the interbank forex market, the rupee opened at 74.92 against the greenback, and touched a high of 74.89 and a low of 75.03 during the session. It finally closed for the day at 74.91 against the American currency, up 11 paise over its previous close.

Forex traders said positive opening in domestic equities, weak American currency and foreign fund inflows supported the rupee. However, rising COVID-19 cases weighed on the local unit, they added.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.13 per cent to 95.81. On the domestic equity market front, the 30-share BSE Sensex surged 399 points to settle at 37,419 on Monday. The broader NSE Nifty rose 120.50 points or 1.11 per cent to end at 11,022.20.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 697.08 crore on Friday, according to provisional exchange data. Brent crude futures, the global oil benchmark, fell 0.60 per cent to USD 42.88 per barrel.

Meanwhile, the number of cases around the world linked to COVID-19 has crossed 1.45 crore and the death toll has topped 6.06 lakh. In India, the death toll due the disease rose to 27,497 and the number of infections has crossed the 11-lakh mark, according to the health ministry.

"Positive news on progress towards a vaccine has provided a 'risk-on' backdrop for equities, with the US dollar continuing to remain under pressure. Rupee and other Asian currencies gained following weakness in dollar," said Devarsh Vakil, Deputy Head Retail Research, HDFC Securities. At least seven Indian pharma companies are working to develop a vaccine against coronavirus.

Bharat Biotech, Serum Institute, Zydus Cadila, Panacea Biotec, Indian Immunologicals, Mynvax and Biological E are among the domestic pharma firms working on the coronavirus vaccines in India. Vakil further said spot USDINR is expected to consolidate in range of 74.50 to 75.50 as importers are rushing in to fulfil their requirements.

"Going ahead, international events like EU-UK negotiations starting from today and G-20 meeting over the week will drive markets," he added. Meanwhile, the Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 75.2420 and for rupee/euro at 85.8025.

The reference rate for rupee/British pound was fixed at 94.4588 and for rupee/100 Japanese yen at 70.37..