Rupee Edges Higher, Closes At 74.91 Against Dollar

The rupee ended the first session of the week at 74.91 against the US dollar, up 0.14 per cent - or 11 paise - from its previous close, and near the strongest level recorded during the session. Gains in domestic share markets amid strong foreign fund inflows and a weaker dollar overseas supported the rupee in the forex market, say analysts. The rupee moved between 74.89 and 75.03 against the greenback tracking gains in most Asian currencies, having started the four-hour session stronger at 74.93 compared with Friday's close of 75.02. (Also Read: Analysts Expect Rupee To Stay Near 74 In Near Term)

Equity benchmarks Sensex and Nifty extended gains to the fourth day in a row led by gains in heavyweight HDFC Bank, after the country's largest lender by market value reported strong earnings for the April-June period. HDFC Bank's earnings added to last week's upbeat showing from IT companies, countering the impact of a surge in domestic coronavirus cases past one million.

The Sensex index ended 1.08 per cent higher at 37,418.99, and the broader Nifty benchmark closed up 1.11 per cent at 11,022.2, led by financial and IT stocks.

While the Japanese yen was last seen trading 0.08 per cent lower against the dollar, the Chinese yuan was up 0.05 per cent, the South Korean won up 0.15 per cent and the Hong Kong dollar up 0.03 per cent. While the Singapore dollar was up 0.03 per cent, the Thai baht was down 0.37 per cent against the US currency at the time. 

The dollar index - which measures the greenback against six currencies - was last seen trading 0.11 per cent lower, having fallen as much as 0.15 per cent earlier on Monday.

Analysts expect the rupee to continue rangebound within 74.50 and 75.50 against the American currency in the near term. 

"Given by the current cautions mode across the market and if RBI continues to hold the rupee near 75.00 or 74.50 levels, it is likely that it may take few attempts to break the same and make a move on the stronger side," said Amit Pabari, managing director at CR Forex Advisors, a forex advisory firm. 

"However, a bounce-back towards 75.40-75.50 levels given by any negative news or Reserve Bank of India intervention will remain selling opportunity for the near term," he added. 

The rupee has recovered 2.60 per cent from a record low of 76.91 logged in April, but is still down 4.97 per cent against the American currency so far this year.