Rupee Snaps Winning Streak, Edges Lower To 73.18 Against Dollar

Rupee Vs Dollar Today: At the interbank foreign exchange market, the local unit opened at 73.02 against the dollar and swing to an intra day high of 72.93.

Rupee Snaps Winning Streak, Edges Lower To 73.18 Against Dollar

Rupee Vs Dollar Today: The rupee settled at 73.18 against the dollar

The rupee snapped its winning streak and depreciated 13 paise against the US dollar on Wednesday, May 19, to settle at 73.18, tracking Asian currencies ahead of the US Federal meet minutes. The demand for the American currency from importers and losses in domestic equities with weaker regional risk appetite also weighed on the domestic currency. At the interbank foreign exchange market, the local unit opened at 73.02 against the dollar and swing to an intra day high of 72.93. It witnessed a low of 73.18. In an early trade session, the domestic unit gained five paise to 73 against the greenback.

The local unit pared gains and witnessed a fall of 13 paise over its previous close, to settle at 73.18 against the dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, gained 0.20 per cent to 89.93.

“The Covid cases are moderating in India and Fed's music will remain the same, so chances of USDINR bouncing are very low. Still traders are awaiting tonight's Fed minutes for the clues about the outlook. The USDINR spot is hovering around 73 zone, the only fear is of RBI intervention in between 72.75-73 zone to curb any excess volatility,'' said Mr. Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services.

''But in absence of RBI, the downtrend in USDINR spot may continue and USDINR spot may trade in between 72.75-73.30,'' he added.

''As flows continue (yesterday a corporate sold $ 700 mio) and with less of buyers of $ in the market USDINR continues to fall only supported by RBI. Let's see when RBI allows it move tad bit higher so that exporters get an opportunity to sell,'' said Mr. Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.

''The slide in the USD/INR is gathering traction, aided by the fact that the number of covid cases in India fell below 300,000 for the second day in a row, and the overall covid situation is not increasing. At 73.36, the currency pair started the day on a negative note. Sharp increases in local stocks also favor a weakening of the currency pair,'' said Kshitij Purohit, Lead International Products & Commodities at CapitalVia Global Research Limited.

''Due to IPOs and QIPs planned by some Indian corporations, Dollar inflows are expected from offshore investors. Importers and corporations do not appear to be buying dollars, and these firms are most likely waiting for the rupee to strengthen further over the 73.00 barrier. If the 73.00 threshold is breached, traders are concerned regarding RBI action,'' added Mr Purohit.

On the domestic equity market front, the BSE Sensex ended 290.69 points or 0.58 per cent lower at 49,902.64, while the broader NSE Nifty slipped 77.95 points or 0.52 per cent to 15,030.15.

“The market remained completely calm in the first session of the trading session, however, we witnessed a vertical decline in the second half due to a sudden fall in US stock futures. The Nifty fell by 77 points while the Sensex fell by 290 points. Shares of Finance and Metals were among the losers, while pharmaceutical and realty stocks rose marginally. The Nifty has formed a classic inverted hammer after hitting a major level at 15140,'' said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

“Nifty medium-term trend remains positive with positive undertone seen across global markets. For the May series, support is seen at 14400; immediate support is yet to mature and hence buying on corrections is advisable. On the higher side resistance seen at 15200 above which 15500 can be conquered. Auto, realty and metals stocks trade with a positive bias while banking can be bought on corrections,'' said Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities.

According to provisional data, the foreign institutional investors (FIIs) were net buyers in the capital markets, as they purchased shares worth Rs 618.49 crore on May 18. Brent crude futures, the global oil benchmark, fell 1.95 per cent to $ 67.37 per barrel.