Rupee Zooms 57 Paise to End at 75.09 against US Dollar


APRIL 30, 2020

The rupee strengthened by 57 paise to finish at a one-month high of 75.09 per US dollar on Thursday, buoyed by foreign fund inflows and a robust trend in the equity market.

The greenback weakening overseas and optimism over a COVID-19 drug trial in the US further supported the local unit, forex traders said.

Moreover, investor risk appetite is improving as India could relax lockdown restrictions in many areas from May 4, they added.

This is the fourth consecutive day of gain for the rupee, during which it has appreciated by 137 paise.

At the interbank foreign exchange, the rupee opened at 75.17. During the session, it touched a high of 74.94 and a low of 75.20. The domestic unit finally settled at 75.09, registering a rise of 57 paise over its previous close.

On Wednesday, the local unit had settled at 75.66 against the US dollar.

Traders said fears surrounding COVID-19 faded to some extent after US pharma firm Gilead’s drug remdesivir showed promise in treating coronavirus patients.

“Also, several countries are easing lockdown restrictions which means the economies will start to get back on track,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

Gupta, however, added that “there is still risk of a second wave of infection and India’s macros are not attractive enough to bring in heavy dollar inflows. Thus, going ahead USD/INR spot may trade above the support of 74.50 towards 75.50/76.00.”

Foreign institutional investors remained net buyers in the capital markets, purchasing shares worth Rs 1,968.80 crore on Thursday, according to provisional exchange data.

Meanwhile, domestic stock markets extended their rising streak for the fourth straight day on firm global cues and short-covering on expiry of F&O contracts.

The 30-share BSE Sensex settled 997.46 points or 3.05 per cent higher at 33,717.62. The broader NSE Nifty soared 306.55 points, or 3.21 per cent, to 9,859.90.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.06 per cent down at 99.50. Brent crude futures rose 7.59 per cent to USD 24.25 per barrel.

“Rupee ended at an one-month high on Thursday as overseas inflows into stocks increased on reports of a potential new treatment for COVID-19 created a buzz and boosted risk appetite, leading to rally in equities both in the US and Asia,” said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.

Devarsh Vakil, Head Advisory, HDFC Securities, said the appreciation in the rupee was largely strong buying seen in the domestic and global equity markets.

“Stocks received a boost after Gilead Sciences Inc said Wednesday morning that a government-run clinical trial evaluating its experimental drug remdesivir in certain COVID-19 patients met the study’s main goal,” he said.

Moreover, “US stocks booked significant gains Wednesday, after Federal Reserve Chairman Jerome Powell vowed to mount a robust and protracted fight to offset fallout from the coronavirus pandemic,” he added.

Federal Reserve policymakers on Wednesday left interest rates near zero. The US dollar traded lower on prospects of further monetary easing.

“On the domestic front, market participants will be keeping an eye on fiscal deficit number and weaker-than-expected number could keep rupee gains in check. Major crosses will also be getting trend from the European Central Bank (ECB) policy statement,” said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Meanwhile, in India, the death toll due to COVID-19 rose to 1,100 and the number of cases climbed to over 33,000 on Thursday, according to the Union Health Ministry.

The number of cases around the world linked to the disease has crossed over 32 lakh and the death toll has topped 2.27 lakh.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 75.6961 and for rupee/euro at 82.1202. The reference rate for rupee/British pound was fixed at 94.3567 and for rupee/100 Japanese yen at 71.04.

Courtesy/Source: News18