Rupee jumps today vs US dollar, a day after seeing the biggest fall in 2 years1 min read . Updated: 08 Apr 2021, 11:47 AM IST
- Positive domestic equities and weak US dollar helped rupee to recover after a big drop in the previous session
The rupee today edged higher against the US dollar, a day after seeing the biggest plunge in nearly two years. The rupee today rose to 74.22 per US dollar, supported by positive domestic equities and weak American currency. On Wednesday, rupee logged its biggest single-day fall in nearly two year when it fell to 105 paise to 74.47 vs USD after Reserve Bank of India committed to a massive government bond purchase programme though it kept repo rate steady.
Meanwhile, a Reuters poll showed that bearish bets on most Asian currencies rose as signs of an economic recovery in the United States and rising coronavirus cases across the region dented the appeal of risk-sensitive assets.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading over 350 points higher in noon trade with Nifty held above 11,900.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth ₹227.42 crore on Wednesday, according to exchange data.
"The non-event RBI meet turned into a big event when the rupee depreciated by more than 1.5% as the dovish stance by the RBI was seen diverging with other hawkish emerging markets central banks like Turkey, Russia, and Brazil. This led to a fall in India’s benchmark 10-year bond yield to the lowest level since 18th Feb and hence, fears of weakening carry trade led to a fall in Rupee. But steady rates support the government’s FY 2021-22 borrowing program at a lower cost and this increases chances of achieving a higher fiscal deficit target before the deadline," said Amit Pabari, MD of CR Forex Advisors
"Moreover, the daily technical chart of USD-INR suggests a breakout from a down trendline above 73.70 levels. Any pullback till 73.70 will be a good opportunity for importers to cover their near-term exposures. Whereas, exporters are advised to participate on every uptick and maintain a defined hedge ratio. The short-term range for USD-INR shifts higher to 73.50-75.00 with an upside bias," he said. (With Agency Inputs)