Rupee snaps 6-session losing run, ends up by 12p at 74.93

The rupee recouped its early losses to close higher by 12 paise at 74.93 against the dollar on Thursday, snapping its six-session losing streak on the back of gains in the domestic equity market and easing crude oil prices.Reports of RBI intervention and the US dollar falling to a 4-week low supported the local currency, analysts said.

The rupee recouped its early losses to close higher by 12 paise at 74.93 against the dollar on Thursday, snapping its six-session losing streak on the back of gains in the domestic equity market and easing crude oil prices.

Reports of RBI intervention and the US dollar falling to a 4-week low supported the local currency, analysts said. At the interbank forex market, the rupee opened weak at 75.19, but recovered lost ground and finished 12 paise higher over its previous close of 75.05. During the trading session, the domestic unit witnessed an intra-day high of 74.92 and a low of 75.33.

Forex markets were closed on Tuesday and Wednesday for holidays.The rupee logged its first gain since March 31. In the six sessions to Monday, the rupee had lost over 2.6 per cent or 193 paise due to concerns over rising coronavirus cases and fears of lockdown measures.

''The Indian Rupee appreciated for the first time in seven sessions against the US dollar as talks of RBI’s intervention in the spot markets outweighed fears over the economic shock of rising COVID-19 infections,'' Sriram Iyer, Senior Research Analyst at Reliance Securities, said.

Meanwhile, some support also came in the form of falling Greenback. The US dollar fell to a 4-week low against other major currencies on Thursday afternoon trade as Treasury yields eased from last month's surge as investors expect the Fed to remain dovish through the year despite a rise in inflation, he added.

''Technically, the USDINR Spot pair found resistance near 75.35-75.50 levels from where the pair settled below 75.00 levels and now could see a downside move up to 74.85-74.70 levels. The USDINR Spot pair could trade in a range of 74.80-75.20 levels,'' Iyer said.

The Indian benchmark government bond yields rose on Thursday to 6.13 per cent, against 6.01 per cent at the previous close despite the central bank buying notes under its so-called government securities acquisition programme, he noted.

The rupee is seen taking some breather after the sharp depreciation witnessed towards nine-month lows. It is majorly the softening of the dollar index, which has provided some cushion to the domestic currency around the 75.50 mark, Sugandha Sachdeva, Vice President - Commodity and Currency Research, Religare Broking, said.

''Even, the domestic equities have recouped from the lower levels, thereby aiding the sentiments for the domestic currency. On the other hand, the path of economic recovery has again been derailed due to the sharp rise in COVID-19 cases in the country and lockdown concerns in several cities. Besides, retail inflation has accelerated to 5.52% in March, a four-month high, amid rising crude oil and metal prices which is a negative trigger for the Indian rupee,'' Sachdeva added.

A sharp surge in the domestic gold imports in March and abundant rupee liquidity after the RBI’s announcement of its bond-buying programme are other headwinds for the rupee-dollar exchange rate.

In the current backdrop, we may witness some respite for the currency with the 75.50 mark acting as short-term support, but the Indian rupee looks broadly skewed on the negative trajectory, she said.

Meanwhile, the 30-share BSE Sensex advanced 259.62 points or 0.53 per cent lower to close at 48,803.68. Similarly, the broader NSE Nifty rose 76.65 points or 0.53 per cent to 14,581.45. Brent crude futures, the global oil benchmark, edged lower by 0.36 per cent to USD 66.34 per barrel. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading slightly higher by 0.02 per cent to 91.69.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 730.81 crore on Tuesday, as per provisional data.