Rupee Logs Mild Gain Against US Dollar; Rangebound Trade Seen Ahead
The rupee (INR) closed nearly unchanged at 69.81 against the US dollar (USD) on Tuesday. That marked only a marginal recovery against the greenback, a day after the rupee posted its biggest single-day gain in seven weeks. The rupee has bounced back a total of 34 paise against the American currency so far this week. Last Friday, the rupee had registered its all-time closing low of 70.15 against the US dollar. At 69.81, the rupee is 0.5 per cent away from that level.
Here are five things to know:
1. The rupee had opened higher at 69.69 and logged further gains during Tuesday's session to touch 69.53 against the US dollar. However, it could not sustain those advances. Fag-end demand for the greenback from importers amid lacklustre movement in the stock markets capped the upside.
2. Market participants stayed away from taking fresh positions ahead of a trading holiday, news agency Press Trust of India reported. The forex and money market will be closed on Wednesday on account of Bakr Id.
3. The rupee has gained some ground after plunging to record lows last week. Analysts expect the rupee to move sideways going forward. "The recent dip in the rupee was more to do with the strengthening of the USD due to money moving out to the dollar as safe haven, than any particular trigger on the Indian economic indicators," Salil Datar, CEO and executive director, Essel Finance VKC Forex, told NDTV.
"However, on the whole, other thing being equal, at the current levels, we expect the rupee to continue to be range-bound between 69.50-70.25," he said.
4. In the international oil market, crude prices rose to $72.89 a barrel - their highest level in a week. Prospects of price support from US sanctions on Iran supported the crude oil price, although the trade dispute between Washington and Beijing kept traders and analysts cautious.
5. The dollar edged lower after US President Donald Trump criticised Federal Reserve Chairman Jerome Powell for raising interest rates coupled with fading safe-haven demand, ahead of the anticipated US-China trade talks. The dollar index - which measures the American dollar's movement against a group of six major currencies - declined to 95.54. Mr Trump said the US central bank should do more to help him boost the economy.
(With agency inputs)