Mumbai: The rupee pared its initial losses and settled 4 paise higher to close at 79.53 against the US dollar on Monday, tracking positive domestic equities and foreign fund inflows.
At the interbank forex market, the local unit opened at 79.66 against the greenback. It witnessed an intra-day high of 79.47 and a low of 79.72 during the session.
It finally ended at 79.53, up 4 paise from its previous close of 79.57.
The dollar index, which measures the greenback’s strength against a basket of six currencies, fell 0.77 percent to 108.17.
Brent crude futures, the global oil benchmark, advanced 1.58 percent to USD 94.31 per barrel.
“Rupee continued to appreciate as the dollar weakened against its major crosses. Market participants remained cautious also ahead of inflation and IIP numbers that will be released on the domestic front,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Somaiya further said the expectation is that inflation could remain unchanged compared to the previous month.
“Gains in the currency were led also by a rally in domestic equities. Euro did witness volatility but hawkish central bank statements kept the currency supported at lower levels,” Somaiya said.
“Indian rupee started the week on a positive note following risk-on moods and a weaker dollar index. Following the stronger Chinese Yuan, the rupee opened at 79.68 and made an intra-day high of 79.4675 before closing at 79.53,” said Dilip Parmar, Research Analyst, HDFC Securities.
Spot USDINR is expected to trade in the range of 79.20 to 79.90 with a near-term bias turning slightly weak amid broad-based dollar weakness.
“The euro extended gains, rising the most in six months against the dollar, after hawkish commentary from ECB policymakers and reports of Ukraine retaking territory from Russia boosted sentiment. The common currency is expected to add gains as there is no apparent big market-moving news and no major development to speak of,” Parmar said.
According to Jateen Trivedi, VP Research Analyst at LKP Securities, rupee traded in a volatile range of 79.45-79.70 and ended near 79.55 as Crude prices gave short covering from lower levels and dollar index stayed weak.
“Prices have been taking support near 79.90-80.00 mark strongly and faced resistance near 79.50, which is the 50 DMA mark, if prices starts trading higher above 79.50 on rupee then further rise in rupee can be seen, which can take price of rupee towards 79.00 levels,” Trivedi said.
On the domestic equity market front, the BSE Sensex ended 321.99 points or 0.54 percent higher at 60,115.13, while the broader NSE Nifty gained 103.00 points or 0.58 percent to 17,936.35.
Foreign institutional investors were net buyers in the capital market on Friday as they purchased shares worth Rs 2,132.42 crore, as per exchange data.
Meanwhile, the country’s foreign exchange reserves declined by USD 3.007 billion to USD 561.046 billion in the week ended August 26, the Reserve Bank of India (RBI) data showed.
Follow on Twitter | Posted by Neha Khan | 
