Mumbai, Mar 17 (PTI) The rupee spurted by 37 paise to close at 75.84 against the US dollar on Thursday, supported by positive domestic equities and broad dollar weakness after the US Federal Reserve hiked rates.
At the interbank forex market, the local unit opened at 75.96 against the greenback and witnessed an intra-day high of 75.77 and a low of 75.97.
It finally settled at 75.84, registering a rise of 37 paise over its previous close of 76.21.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, slipped 0.39 per cent to 98.23.
On a weekly basis, the rupee appreciated 63 paise against the American currency. Markets will be closed on Friday on account of Holi.
The rupee registered the best weekly gain after December 24 amid weakness in the dollar index, rebound in risk sentiments, stable crude oil price and inflows from foreign funds, said Dilip Parmar, Research Analyst, HDFC Securities.
The dollar index retreated after the Federal Open Market Committee (FOMC) delivered a 25 bps hike on Wednesday and signalled six more rate hikes this year.
“It has effectively matched the hawkish expectations of the market this year and exceeded them for 2023. The near-term focus will remain on geopolitical news and movement of risk assets which will give direction to the local unit.
“Spot USD/INR could further fall towards 75.60 while 76.10 becomes the resistance,” Parmar added.
Brent crude futures, the global oil benchmark, advanced 5.02 per cent to USD 102.94 per barrel.
On the domestic equity market front, the BSE Sensex ended 1,047.28 points or 1.84 per cent higher at 57,863.93, while the broader NSE Nifty surged 311.70 points or 1.84 per cent to 17,287.05.
Foreign institutional investors emerged as net buyers in the capital market on Wednesday as they purchased shares worth Rs 311.99 crore, as per stock exchange data.
“The Indian rupee has logged strong gains as the US Fed has hiked interest rates by one-quarter of a percentage point largely on expected lines, which boosted risk sentiments in the markets,” said Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking Ltd.
Besides, there has been a slide in the greenback even as investors continue to digest the US Fed’s hawkish outlook to stamp out inflation running at a 40-year high in the US.
“Splendid gains in equities amid hopes of a peace agreement between Russia and Ukraine are further aiding the local currency. As of now, the Indian rupee has been well cushioned by the 77 mark and as long as that is not taken out, sentiments are favouring further appreciation in the near-term,” Sachdeva added.
According to Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities, the US Fed was hawkish but in line with market expectations.
Being so close to the financial year end, USD sales from corporates tend to increase. Once 76 broke on spot, hedgers emerged, Banerjee said.
“We need to keep an eye on oil as Brent crude has bounced from 96 dollars a barrel and can once again move higher. If oil moves higher next week, then USD-INR may not see much of a downside. We expect a range-bound trading over the next week, between 75.50 and 76.30 on spot,” Banerjee added. PTI DRR BAL ABM ABM
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Source: The Print
