Rupee Snaps Winning Streak, Edges Lower To 72.55 Against Dollar

Rupee vs Dollar Today: The rupee snapped its four-session winning run to edge lower by nine paise against the US dollar on Tuesday, March 16, to settle at 72.55, tracking muted domestic equities and stronger American currency. At the interbank foreign exchange market, the domestic unit opened at 72.46 against the dollar and registered an intra-day high of 72.37. It witnessed a low of 72.64. In an early trade session, the local unit gained five paise to 72.41 against the greenback supported by positive domestic equities. The rupee closed at 72.55, registering a fall of nine paise over its previous closing. On Monday, March 15, the local unit settled at 72.46.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, climbed 0.04 per cent to 91.87. 

What analysts say

”Flows from REC hit the market yesterday bringing USDINR down to below 72.50. March is a month of inflows which will continue and make USDINR vulnerable to more on downside as IT Companies sell, flows from Corporates and IPOs keep hitting the market. Anything near to 72.75 should be a good sell for the day while 72.25 should be a good buy,” said Anil Kumar Bhansali, Head- Treasury, Finrex Treasury Advisors. 

“Rupee depreciated amid strong dollar and muted domestic markets. Further, rupee slipped on disappointing macroeconomic data. Market remained cautious ahead of major central banks monetary policy meetings. However, sharp downside was prevented on softening of crude oil prices.,” said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

”Crude oil prices slipped on concern about slow pace of vaccination in the EU after Germany, France and Italy joined other European nations to hit pause on the AstraZeneca COVID-19 vaccine. Rupee may trade in the range of 72.25 to 73.00 in next couple of sessions,” he added.

“After four days of winning streak, rupee fell following firmer dollar ahead of the Federal Reserve’s key monetary policy meeting,” said Dilip Parmar, Research Analyst, HDFC Securities.

“All eyes will remain on the Federal Open Market Committee (FOMC) meeting outcome announcement tomorrow as comments from the Fed will be important for the dollar movement and risk sentiment,” he said.

Additionally, on the domestic equity market front, the BSE Sensex ended 31.12 points or 0.06 per cent lower at 50,363.96, while the broader NSE Nifty fell 19.05 points or 0.13 per cent to 14,910.45.

”FMCG and technology stocks saved the market today, otherwise the Nifty/Sensex would have reached 14,800/50000 again due to weakness in bank stocks and metal companies. The global market was stable and long-term bond yields were also trading in the short-range. We believe that the markets would remain on the sidelines until the FOMC meeting is completed,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

According to exchange data, the foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 1,101.35 crore on March 15. Meanwhile, Brent crude futures, the global oil benchmark, fell 1.51 per cent to $ 67.84 per barrel.