Rupee Gains To 73.07 Against Dollar On Last Day Of 2020

The rupee gained 24 paise against the US dollar on Thursday, December 31, amid positive domestic equities and unabated foreign fund inflows. The domestic unit rose for the sixth straight session to close at 73.07 against the dollar on the last trading day of the year, supported by weak American currency and a rise in risk appetite. At the interbank foreign exchange market, the local unit opened at 73.15 against the dollar and registered an intra-day high of 73.01. It witnessed a low of 73.17.  In the opening session, the rupee appreciated by 19 paise to 73.12 against the dollar. It settled at 73.07 against the greenback, registering an increase of 24 paise over its previous close. On Wednesday, December 30, the domestic unit surged by 11 paise to settle at more than a two-month high of 73.31 against the American currency.

In the last six trading sessions, the rupee has gained 77 paise. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, declined 0.09 per cent to 89.59. According to traders, market sentiments improved on hopes of global economic recovery from pandemic buoyed by the rollout of COVID-19 vaccines and extraordinary fiscal and monetary stimulus.

"Rollout of vaccine strengthened hopefulness that surging infection cases may be checked. Additionally, UK granted emergency use authorization for vaccine developed by University of Oxford and AstraZeneca PLC," said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas. ''Rupee may gain strength on consistent FII inflows. Rupee may trade in the range of 72.75 to 73.65 in next couple of sessions'', he added.

“2020 has been a year where RBI played an extremely important role of keeping volatility in check. They sold aggressively when USD rose in value during Covid panic of March-April. Then they bought close 100 billion dollars, to prevent Rupee from appreciating, when inflows gushed to Indian capital markets. During 2021, If the global trend of USD remains downward, Then USDINR can decline towards 70.00 levels,'' said  Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives, Kotak Securities Ltd.

On the domestic equity market front, the BSE Sensex ended 5.11 points or 0.01 per cent higher at 47,751.33, while the NSE Nifty slipped 0.20 points to 13,981.75. 

“On the last day of December F&O expiry series the benchmark index nifty hit yet another all-time high of 14024.85 meanwhile, the BSE Sensex also registered fresh all time high of 47896.97. In this month the Sensex rallied near 8 percent. A sharp rally from 44000 to 47800 clearly suggest bulls are in total control and heading towards 48000-48500,'' said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

According to provisional exchange data, the foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,824.52 crore on December 30. Brent crude futures, the global oil benchmark, declined 0.21 per cent to $ 51.52 per barrel.