Rupee Settles Higher To 73.24 Against Dollar Amid Market Gains

The rupee gained seven paise against the US dollar on Friday, January 8, to settle at 73.24 tracking an intense rally in domestic equities, while also reflecting a sharp recovery from the day’s lowest level. The domestic unit started on a sluggish note and declined to an intraday low of 73.45 against the American currency during the day’s session. It swung between 73.20 to 73.50 during the day’s session. However, for a greater part of the trading session, the local unit remained under pressure due to stronger American currency against the key rivals and surging prices of oil. The rupee declined 20 paise lower at 73.31 against the dollar on Thursday, January 7. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.12 per cent to 89.93.

The domestic unit recorded a volatile trading session throughout the week. The rupee suffered losses on Thursday due to muted domestic equities and tumbled 20 paise to 73.31 against the dollar. On Wednesday, the rupee closed marginally higher at 73.11 against the dollar. Whereas, on Tuesday, January 5, the local unit declined 15 paise at 73.17 against the greenback even amid market gains. Ending the week’s session on a positive note, the rupee gained a smart recovery to close higher at 73.24 against dollar, amid an intense rally in domestic markets.

Sriram Iyer, Senior Research Analyst at Reliance Securities, said the rupee appreciated against the US dollar on Friday supported by hopes of additional fiscal stimulus in a Democrat-controlled US government. “The local unit had weakened to 73.46 earlier today probably on the back of importers’ greenback bids, firm oil prices and an uptick in the dollar index, but recouped losses on the back of strong local equities,” he added

On the domestic equity market front, the BSE Sensex surged 689.19 points or 1.43 per cent to close at a record 48,782.51, while the NSE Nifty climbed 209.90 points or 1.48 per cent to 14,347.25. ‘“The start of calendar year has been good with Nifty-50 and BSE Sensex gaining 2.3 per cent and 1.9 per cent, respectively this week. The broader indices have performed even better than the benchmark indices. The Nifty Mid Cap 100 Index and BSE Small Cap Index have gained 5.2 per cent and 2.7 per cent, respectively this week. On the back of rising metal prices and of very good Q3 earnings expectations the BSE Metal Index rose by 9 per cent this week,” said Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities.