The rupee settled 7 paise lower at 73.53 against the US dollar today amid mixed signals. The weakness of the US dollar and the fall in the price of crude oil, however, provided some support to the rupee, helping it to contain losses to some extent.
Starting the session on a lukewarm note, the Indian currency traded between a high of 73.40 and a low of 73.61 for the US dollar during the session. It ultimately ended the day at 73.53, down 7 points from its previous close.
On a weekly basis, the national currency lost 39 peas against the US dollar – the rupee’s first weekly decline after four successive weeks of gains.
The dollar index, which measures the strength of the greenback against a basket of six currencies, fell 0.14 percent to 93.20.
“We expect the rupee to see some consolidation, but we are trading with an upward bias in the short term. Although the selloff in US stocks has been a drag, we expect the dollar index is moderate, which comes with large portfolio inflows. should keep the rupee strong. However, any escalation in Indochinese tensions could increase volatility and 72.80 on the rupee marks a near-term high for the pair, ” Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking Ltd
Meanwhile, global benchmark Brent crude oil futures fell 0.85 percent to $ 39.72 per barrel.
“The Indian rupee wiped out Thursday’s gain and marked the first weekly loss after four consecutive weekly gains,” said Devarsh Vakil, deputy director of retail research at HDFC Securities.
On the domestic stock market front, the Sensex BSE benchmark finished 14.23 points or 0.04 percent higher at 38,854.55. The wider NSE Nifty rose 15.20 points or 0.13 percent to close at 11,464.45.
Foreign institutional investors were net buyers in the capital market because they bought stocks worth ₹The exchange data showed 1,175.81 crore on a net basis on Friday.
Meanwhile, India and China have agreed on a five-point roadmap that includes swift troop disengagement and avoiding any action that could escalate tensions to resolve the four-to-one face-to-face. months in eastern Ladakh.
On the COVID-19 front, a roadblock in coronavirus vaccine trials weighed on foreign exchange sentiment, traders said.
The Serum Institute of India has said it is suspending clinical trials of an experimental COVID-19 vaccine for which it has been enlisted to manufacture a billion doses. (With PTI inputs)