Rupee Gains For Second Straight Day, Edges Higher To 73.51 Against Dollar Amid Positive Domestic Equities

Rupee Vs Dollar Today: The rupee settled at 73.51 against the dollar

Gaining for the second straight session, the rupee edged higher by 27 paise against the US dollar on Friday, May 6, to settle at 73.51 (provisional), tracking positive domestic equities and a weaker American currency. At the interbank foreign exchange market, the local unit opened at 73.62 and witnessed an intra day high of 73.50. It registered a low of 73.76. In an early trade session, the domestic unit rose 16 paise to 73.60 against the greenback. The domestic currency closed at 73.51, recording a gain of 27 paise over its previous close.

The rupee witnessed a volatile session throughout the week. On Thursday, May 6, the local unit settled at 73.78 against the dollar. On Wednesday, May 5, the domestic unit snapped its two-day winning streak and edged lower by six paise to close at 73.91 against the greenback. On Tuesday, May 4, the local unit gained 10 paise to settle at 73.85 against the dollar. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.19 per cent to 90.78.

“The USDINR spot has continued the downtrend and has lacked enthusiasm ahead of US NFP data. The primary reason is traders are focusing on global recovery and increase in vaccination drives in the euro zone. Also, seems like the local fx market has likely factored in the slow economic recovery amid escalating coronavirus cases in India, but still some cautious sentiments prevail,” said Mr. Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services

Next week’s USDINR trading range will mostly depend on how DXY reacts to NFP data. If improving economic data stokes inflation worries and leads to expectations that the Fed will reduce monetary stimulus, that could boost US yields and the dollar,” added Mr Gupta.

”The RBI’s dollar selling intervention was passive in nature, as the sell-side dollar intervention would drain rupees from the system. Technically USD/INR gave a gap-down opening today below the support levels formed in yesterday’s session and tried to breach the same but were not able to sustain above it and soon tested resistance at the Bearish trend line, after which we witnessed a sharp fall and took support in 74.00-73.90,” said Kshitij Purohit, Lead International Products & Commodities at CapitalVia Global Research Limited.

”If this support zone also gets breached with ample amounts of volume, we might witness prices falling down to 73.80-73.70 zone, on the contrary if prices formed strong support here, and gave a bounce back from 74.00-73.90 zone, it might get challenged on the upside in the range of 74.15-74.25,” added Mr Purohit.

On the domestic equity market front, the BSE Sensex ended 256.71 points or 0.52 per cent higher at 49,206.47, while the broader NSE Nifty climbed 98.35 points or 0.67 per cent to 14,823.15.

“Since the last few weeks, on a weekly closing of the market, the Nifty/Sensex failed to sustain at higher levels. The market breadth was healthy when it opened but due to some profit-taking in financials, Auto and Technology companies, the Nifty closed at opening levels. It has formed an indecisive formation on a daily chart, however, on a weekly basis, Nifty/Sensex gained 400/1200 points from the lowest levels,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

“The Nifty-50 managed to climb the wall of worries and has posted weekly gains of ~1.3%. Indian markets are witnessing wild swings in the face of surging Covid-19 cases that have prompted several states to extend restrictions on movement by 1-2 weeks. The broader markets are seeing very good action due to the result season. Both, NSE MidCap and BSE Small Cap Index have outperformed the Nifty-50 this week,” said Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities.

According to exchange data, the foreign institutional investors were net buyers in the capital market on May 6 as they purchased shares worth Rs 1,222.58 crore. Brent crude futures, the global oil benchmark, fell 0.16 per cent to $ 67.98 per barrel.

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