The rupee strengthened by 63 paise to close at 73.13 against the US dollar on Thursday amid positive macroeconomic data and a weak greenback overseas.
At the interbank forex market, the domestic unit opened at 73.60 against the US dollar and touched an intra-day high of 73.07 and a low of 73.60.
It finally settled at 73.13, registering a rise of 63 paise — its biggest single-day jump in a month.
Forex traders said the appreciation in the rupee was supported by strong macroeconomic data.
“We are expecting the rupee to trade with a slight appreciation bias in the near-term, given the persistent dollar inflows in the domestic market and a healthy current account surplus,” said Sugandha Sachdeva, VP-Metals, Energy and Currency Research, Religare Broking.
Sachdeva further noted that “72.80 remains a strong hurdle for the rupee, and the Reserve Bank of India may not be very comfortable allowing it to appreciate above those levels.” Going ahead, the market will be watching developments around the next round of US fiscal stimulus package, without which the upbeat risk appetite may not be able to sustain for very long, Sachdeva said.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.11 per cent down at 93.78.
On the domestic equity market front, the 30-share BSE benchmark Sensex zoomed 629.12 points or 1.65 per cent to close at 38,697.05.
The broader NSE Nifty advanced 169.40 points or 1.51 per cent to finish at 11,416.95.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 712.48 crore on Wednesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.38 per cent to USD 42.14 per barrel.
“Indian rupee marked the biggest single day gains after a month and outperformed among Asian peers on back of foreign fund inflows, weaker dollar index and better than expected economic data,” said Devarsh Vakil, Deputy Head Retail Research, HDFC Securities.
Vakil further said “risk sentiment has been buoyed by hopes that a US stimulus package is getting closer.” On a weekly basis, the domestic currency gained 48 paise to the US dollar.
According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the domestic unit also took support from offshore Chinese Yuan, which appreciated over 0.5 per cent on Thursday against the US dollar.
“Asian currencies traded with an upward bias on Friday supported by prospects of more US fiscal stimulus which could determine whether the economic recovery momentum continues,” Iyer said.
Indian money markets will be shut on Friday on account of Mahatma Gandhi Jayanti.
“Fund inflows have been one of the major triggers that led to appreciation in the rupee. Retracement in the dollar against its major crosses also supported the rupee,” said Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services.
From the US, market participants will keep an eye on employment numbers and better-than-expected data could support the dollar at lower levels, Somaiya said.
We expect USDINR (Spot) to quote in the range of 73.05 and 73.50,” he added.
