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 per cent to 108.17. Brent crude futures, the global oil benchmark, advanced 1.58 per cent 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.