The rupee ended marginally lower at 74.83 per US dollar on Friday, but posted a weekly gain of 0.24 percent led by foreign capital inflows and upbeat domestic equity markets, analysts said.
The Indian rupee ended marginally lower at 74.83 per US dollar on Friday, but posted a weekly gain of 0.24 percent led by foreign capital inflows and upbeat domestic equity markets.
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For the week, the rupee appreciated by 0.24 percent. Last Friday, it closed at 75.01 per dollar. The USD/INR spot traded in a very tight range of 74.50-75 his week.
“The USD/INR pair was unable to fall below 74.50 on likely RBI intervention and caution over US-China trade war. If the trade tiff escalates then fears of US ending the phase-1 deal will arise keeping USD/INR afloat. We don’t expect a sharp rally as traders are focusing on the coronavirus vaccine developments and are pretty convinced over getting additional stimulus packages,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
The Foreign Institutional Investors (FII) have turned net buyers in the domestic capital market segment by infusing Rs 7,381.92 crore in the last four days alone, as per data available on the exchanges.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, eased after investors sentiment improved on hopes of additional stimulus packages.
The European Union leaders reached a deal on a 750 billion euro coronavirus pandemic recovery fund on Tuesday and with European Central Bank monetary policy expected to stay ultra-loose for a long time optimism about the year ahead improved, a Reuters report said.
“In spot 75 is acting as a psychological resistance, consistent trading above that will lead to a rally towards 75.50. The USD/INR 1-month ATM volatility has dropped to 5 percent from 5.67 percent as on July 14," Gupta said.
The fall in the ATM Volatility Term structure indicates that the market is not showing signs of stress.
"Until significant cues, we expect USD/INR to continue the sideways move within a broader range of 74.50-75.50. Only either side break will clarity over the trend,” added Gupta.
First Published: IST