Rupee Rebounds To Close 2 Paise Higher At 90.16 Against US Dollar
A volatile geopolitical situation kept the domestic currency under pressure, restricting its recovery, forex analysts said.
The rupee recovered from low levels and settled 2 paise higher at 90.16 (provisional) against the US dollar on Monday on weak American currency and sliding crude oil prices.
Equity market sentiment also improved after the new US envoy to India, Sergio Gor, said that both sides are actively engaged in firming up a trade deal, forex analysts said.
However, a volatile geopolitical situation kept the domestic currency under pressure, restricting its recovery, they said. Also, traders awaited cues from domestic and US macroeconomic data to be released this week.
At the interbank foreign exchange, the rupee opened at 90.23 and strengthened to 90.13 during intra-day. It also touched a low of 90.25 before ending the session at 90.16 (provisional) against the greenback, registering a gain of 2 paise from its previous closing level.
On Friday, the rupee depreciated by 28 paise to close at 90.18 against the US dollar.
The rupee opened weak on risk aversion in global markets and rising geopolitical tensions, but recovered on a bounce back in domestic markets after US Ambassador Sergio Gor said that the delegates of both nations are working to finalise a trade deal, said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.
"Traders now focus on inflation data from the US and India. USD-INR spot price is expected to trade in a range of Rs 89.90 to Rs 90.60," he added.
Meanwhile, the dollar index, which measures the strength of the greenback against a basket of six currencies, was trading 0.34% lower at 98.55.
Brent crude, the global oil benchmark, was trading 0.28% lower at USD 63.16 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index Sensex gained 301.93 points or 0.36% to settle at 83,878.17, while the Nifty rose 106.95 points or 0.42% to 25,790.25.
Foreign institutional investors offloaded equities worth Rs 3,769.31 crore on Friday, according to exchange data.
The latest weekly data released by the Reserve Bank of India (RBI) on Friday showed India's forex reserves dropped by $9.809 billion to $686.801 billion in the week to Jan 2. In the previous week, the reserves had jumped by $3.293 billion to $696.61 billion.
