Rupee stages big recovery, below 70 a US dollar: 5 things to know1 min read . Updated: 21 Dec 2018, 12:09 PM IST
The rupee today settled higher at 69.70 a dollar, recovering from day's low of 70.68.
Staging a big intraday recovery, the rupee today closed at 69.70 against the US dollar. This is the highest close for the rupee since November 30. At one point, the rupee today had fallen to as much as 70.68 against the US dollar today. A recovery in domestic equity markets and softening crude oil prices boosted the rupee, which had closed at 70.39 against the US dollar on Wednesday. The US dollar was broadly lower against a basket of global currencies.
Here are 5 things to know about rupee’s rebound today
1) Indian stock markets today also recovered from their lows to close mildly lower. At day’s low, the Sensex fell as much as 280 points. The Sensex today settled nearly 50 points lower today.
2) Also lifting sentiment was a decline in oil prices. International benchmark Brent crude futures were down nearly 2% at $56.20 per barrel, after climbing almost 2% the session before. Worries about oversupply and the outlook for the global economy have pushed oil prices down about 30% from October highs.
3) Tumbling oil prices have put rupee on course for its best quarter since March 2017. Many analysts expect the rupee to continue strengthening into the New Year after a largely painful 2018. Cheaper oil and a liquidity measures taken by the Reserve Bank of India have driven gains in Indian assets. The Sensex on Wednesday logged its seventh straight day of gains. “Domestic assets are likely to outperform, given lower crude," forex advisory firm IFA Global said in a note.
4) Overnight, the US Federal Reserve raised rates, as expected, but it also signalled “some further gradual" rate hikes. It also stuck to the plan of cutting its massive bond portfolio. The dollar initially gained as the Fed was seen as more hawkish, but it lost steam against other safe-haven currencies, such as the yen.
5) The Bank of England will announce its policy decision later in the day. Forex traders will also be watching for US personal income and spending and inflation data due on Friday. “The BoE is expected to leave the overnight rate unchanged at 0.75%, given the risks to the UK economy from Brexit uncertainty," IFA Global said in a note.