Rupee firms up 10 paise to finish at 73.15 against US dollar

Mumbai: The Indian rupee strengthened gains for the second straight day and closed 10 paise higher at 73.15 against the US dollar on Wednesday, tracking upbeat Asian currencies and sustained foreign fund inflows.

At the interbank forex market, the rupee opened at 73.16, and hit an intra-day high of 73.10 and a low of 73.23. It finally finished at 73.15, higher by 10 paise over its last close.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.07 per cent to 90.15.

“The Indian rupee appreciated against the US dollar for the second straight session against the US currency, tracking rise in most regional peers and a slight pullback in the dollar index,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.

The local unit has also been helped by foreign inflows in equities with overseas investors pumping in just under USD 2 billion in Indian shares in the month of January, Iyer said.

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According to Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas, the Indian rupee traded with a positive bias on weakness in dollar and steady FII inflows.

“However, sharp gains were capped on surge in crude oil prices and worries over rising coronavirus cases across globe and tightened COVID-19 restrictions to curb the outbreak. Rupee may trade in the range of 72.85 to 73.60 in next couple of sessions,” Mukadam noted.

On the domestic equity market front, the BSE Sensex ended 24.79 points or 0.05 per cent lower at 49,492.32, while the broader NSE Nifty advanced 1.40 points or 0.01 per cent to 14,564.85.

Foreign institutional investors continued flocking to Indian markets, netting equities worth Rs 1,879.06 crore on a net basis on Wednesday, according to exchange data.

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On the domestic macro economic front, declining vegetable prices brought down the retail inflation to a 15-month low of 4.59 per cent in December and within the comfort zone of the Reserve Bank.

Industrial production contracted by 1.9 per cent in November, entering the negative territory after a two-month gap, mainly due to poor showing by manufacturing and mining sectors, official data showed on Tuesday.

Brent crude futures, the global oil benchmark, rose 0.18 per cent to USD 56.68 per barrel.

The Korean won and the Thai baht led Asian currencies higher, climbing 0.5 per cent each. Among other major gainers, the Indonesian rupiah and the Malaysian ringgit were up 0.3 per cent each to the dollar.

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