Rupee Erased Initial Gains, Settles 12 Paise Lower At 73.42 Against Dollar Amid Rising COVID-19 Cases

The rupee erased its initial gains of the session and slipped 12 paise against the US dollar on Tuesday, April 6, to settle at 73.42 amid worries that rising COVID-19 cases and lockdown restrictions announced in some states may impact the economic recovery. At the interbank foreign exchange market, the domestic unit opened at 73.22 against the dollar and traded in the range of 73.20 to 73.42 throughout the session. In an early trade session, the local unit gained 10 paise to 73.20 against the dollar. It closed at 73.42 against the greenback, registering a fall of 12 paise over its previous closing of 73.30.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.13 per cent to 92.71. Meanwhile, investors remained cautious ahead of the Reserve Bank of India’s (RBI) policy statement to be announced on Wednesday, April 7. The gains registered in crude oil prices and stronger dollar overseas weighed on the local unit’s sentiment. 

On the domestic equity market front, the BSE Sensex ended 42.07 points or 0.09 per cent higher at 49,201.39, while the broader NSE Nifty climbed 45.70 points or 0.31 per cent to 14,683.50. ”After a sharp sell-off in the previous session, Indian benchmark equity indices ended marginally higher on April 6 amid some volatile moves,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

”Nifty has formed an inside day compared to the previous session’s high-low, suggesting no fresh directional clues. The intraday volatility has however become smaller which is a good sign. Greater participation of small and midcaps has resulted in a healthy advance-decline ratio,” he added.

According to exchange data, the foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 931.66 crore on April 5. Brent crude futures, the global oil benchmark, were trading 2.37 per cent up at $ 63.62 per barrel.