The rupee was strengthened by as much as 30 paise – or 0.40 percent – to 75.61 against the US dollar on Tuesday amid a mixed trend in Asian currencies. The rupee moved within a range of 75.61-75.79 during the four hour session after starting the day at 75.77 against the greenback. Sharp gains in the domestic stock markets and weakness of the dollar supported the rupee according to analysts. It was last seen at 75.68 against the US currency in early afternoon deals, up 23 per cent. Compared to its previous closure.
Domestic stock market benchmarks S&P BSE Sensex and NSE Nifty 50 jumped more than 2 percent on Tuesday, rebounding after three straight downward sessions.
Stocks elsewhere in Asia were positive following a sharp rise in Wall Street overnight, after optimism, the global economy would recover quickly after a successful early stage trial with a coronavirus vaccine.
Analysts say the rupee is likely to move sideways in the short term as investors evaluate the coronavirus-related messages.
“In the midst of the mixed sentiment in the market, the rupee is likely to remain in dilemma to pave its further course. For the pair (rupee-dollar), 74.80-76.20 is an important short-term range and a sold trigger would be needed for a breakthrough,” said Amit Pabari, CEO of forex consulting firm CR Forex, in a note.
“If the current range is broken, it brings a momentum of 80-100 paise in the pair,” he said.
Crude oil prices were unstable, with Brent crude – the global crude oil benchmark – falling 0.6 percent to $ 34.62 a year. Barrel, having previously touched the highest since April 9.
The dollar index – which measures the greenback against six peers – fell 0.25 per cent. At today’s weakest level and was last seen 0.23 per cent.
At Monday’s close of 75.91, the rupee is down 6.38 percent against the US dollar so far this year.
Foreign exchange markets are currently operating within reduced trading hours due to the coronavirus-induced lockdown. The temporary times are from 10 to 14 instead of the normal timings from 9 to 17.