Extending its winning streak for a fifth straight session, the rupee gained 22 paise against the US dollar on Wednesday, November 3, to settle at a nearly one-month high of 74.46, on the back of easing crude oil prices and foreign fund flows into domestic IPOs. At the interbank foreign exchange market, the local unit opened at 74.64 against the dollar and swung in the range of 74.46 to 74.64 during the trading session. In an early trade session, the local unit rose 14 paise to 74.54 against the greenback.
The domestic unit settled at 74.46 – a level not seen since October 5, 2021. In the five trading sessions to Wednesday, the local unit has strengthened by 57 paise or 0.76 per cent against the greenback. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.03 per cent to 94.04. According to forex dealers, a weak American currency in the overseas market also helped the local unit.
Mr Amir Pabari, MD, CR Forex:
”Globally, the US dollar index remains firm near 94.10 levels as markets now await policy outlook guidance from the conclusion of the Nov. 2-3 FOMC meeting. So far dollar has been backed by expectations of the announcement that it will be tapering its $120 billion monthly bond purchase.
Nonetheless, the recent jump in inflation has challenged the Federal Reserve’s “transitory” narrative thus the timing of US interest rate hikes and comments regarding inflation will be watchful which would set the tone for dollar hereon.
Oil prices slipped by more than one per cent as the latest data showed a spike in US crude inventory creating pressure over OPEC to increase supply thereby keeping the rupee supportive. Technically, the next support for the pair is near 74.50 and 74.90 remains a strong resistance, keeping the pair consolidated between 74.50-74.90 until we get some directives on the outcome of the Fed’s policy meeting.”
Currency Desk, Emkay Global Financial Services:
“This week was a short week with USDINR spot witnessing a downtrend on IPO subscriptions. But we can brace for a heightened volatility next week after the FOMC, BOE monetary policy decisions, OPEC meeting and US NFP data. Only a hawkish Fed could lead to a bounce in USDINR spot as tapering announcement seems to be a done deal. So we expect USDINR spot to trade within 74.20-75.20.”
Domestic Equity Markets Today:
On the domestic equity market front, the BSE Sensex ended 257.14 points or 0.43 per cent lower at 59,771.92, while the broader NSE Nifty declined 59.75 points or 0.33 per cent to 17,829.20.
”Nifty has entered a corrective phase and is expected to remain under pressure for the short term. Resistance is expected around 18000-18100 levels while we see value around the 17000-17200 mark. Advice traders to keep a check on leverage positions while investors can use deeper correction to accumulate frontline stocks. IT and metals can be accumulated on corrections,” said Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities.
According to exchange data. the foreign institutional investors were net buyers in the capital market on November 2, as they bought shares worth Rs 244.87 crore. Brent crude futures, the global oil benchmark, fell 1.63 per cent to $83.34 per barrel in global trade.