Rupee ends at highest level since March 18, gains 53 paise

Indian rupee erased early losses and ended at the highest level since March 18 against the US dollar. It ended 53 paise higher at 74.32 per dollar, amid buying seen in the domestic equity market.

It opened 6 paise lower at 74.91 per dollar against Friday's close of 74.85.

At 14:28 IST, the Sensex was up 454.53 points or 1.18% at 38889.25, and the Nifty was up 123.30 points or 1.08% at 11494.90.

Concerns about the US economy, combined with an excess supply of dollars already in circulation due to the Fed’s massive quantitative easing, are likely to weigh on the US dollar in the near term, said ICICIdirect.

Crude oil prices nudged higher on Monday as storms bore down on the Gulf of Mexico, shutting more than half the region's oil production, although gains were capped by ongoing concerns about demand from coronavirus lockdowns.

The dollar steadied against major currencies on Monday as traders looked to the Federal Reserve’s annual Jackson Hole retreat for guidance on the outlook for U.S. monetary policy.

Gold prices fell on Monday as risk sentiment improved after the U.S. drug regulator authorised the use of blood plasma from recovered COVID-19 patients as a treatment option, and the dollar held firm.

“In the week gone by Indian rupee appreciated by 0.04 percent and currently stands at 74.9 against the US dollar. In a World BanK report in the past week they projected a steeper contraction than the 3.2 percent they had earlier forecasted in FY21 for India on account of the rising cases of coronavirus in India and the resultant regional lockdowns from the same," said Vaqarjaved Khan, Research Analyst, Angel Broking.

"The US FED meeting minutes that were released during the past week projected a grimmer outlook for the US economy with the officials at the meeting agreeing that the ongoing health crisis would weigh heavily on economic activity, employment and inflation in the near term. The pandemic is capable of posing considerable risks to the US economy over the medium term as well."

"With a grimmer outlook for both US and Indian economies USDINR is likely to move in the range from 74 at the lower end of the spectrum and 76 at the higher end of the spectrum in the current week. (24th-28th August 2020),” he added.