Rupee closes higher against US dollar

Rupee

Indian rupee closed higher tracking gains in local equity markets and a weak dollar. The home currency ended at 82.06 against the dollar, up 0.13 percent from its previous close of 82.17.

The US Dollar is trading near its lowest levels in 15 month while both India's flagship Sensex and Nifty indices continued to hit fresh record highs after US inflation in June rose at the slowest pace in more than two years, fuelling bets that the Federal Reserve may be close to ending its rate hiking cycle. The BSE Sensex touched 66,656 points while Nifty crossed 19,730 points.

"We expect the Rupee to trade with a slight positive bias on account of the rise in risk appetite in global markets and the weakness in the US Dollar. A decline in crude oil prices and foreign inflows may also support the Rupee. However, concerns over global economic slowdown may cap a sharp upside. Market participants may remain cautious ahead of retail sales data from US and UK’s inflation data this week. We expect the USDINR spot to trade between 81.60 to 82.50 in the near term", said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.

Despite the dollar trading below 100, the rupee wasn’t able to fully translate as oil marketing companies and other corporate were seen grabbing the opportunity of the lower spot, analysts said

"The rupee may show some resilience to its original support of 81.80 and try to pull back towards 82.20-30 levels as Yuan again depreciated from 7.12 to 7.17 and Yen halted its six-day winning streak. However, pressure still mounts on the US Dollar index to recover above 100, but it’s hard to find evidence for the same. Overall, we expect the pair to narrow down its momentum to trade in a range of 81.80 to 82.30 but eventually will give a breakout, mostly on the downside to test 81.50 levels", said CR Forex in its latest note.

Meanwhile Asian currencies were trading mixed. Japanese yen rose 0.5 percent, Thai Baht gained 0.13 percent, Philippines peso and Hong kong dollar were up 0.04 percent each. Among losers, Taiwan dollar fell 0.56 percent, China renminbi lost 0.36 percent, Indonesian rupiah 0.31 percent.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 99.815, down 0.10 percent from its previous close of 99.914.