Mumbai, Feb 15 (PTI) Snapping its five-session losing streak, the rupee surged 28 paise to close at 75.32 against the US dollar on Tuesday amid signs of easing Russia-Ukraine tensions.
A recovery in domestic equities and weakness of the greenback overseas further helped the domestic currency, analysts said.
At the interbank forex market, the local unit opened on a weak note at 75.60 against the greenback and witnessed an intra-day high of 75.31 and a low of 75.72. It finally settled at 75.32, a rise of 28 paise over its previous close.
On Monday, the rupee had slumped by 24 paise to close at an over nine-week low of 75.60.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, fell 0.37 per cent to 96.01.
On the domestic equity market front, the BSE Sensex ended 1,736.21 points or 3.08 per cent higher at 58,142.05, while the broader NSE Nifty jumped 509.65 points or 3.03 per cent to 17,352.45.
Brent crude futures, the global oil benchmark, was trading 2.76 per cent lower at USD 93.82 per barrel.
Foreign institutional investors remained net sellers in the capital market on Monday as they offloaded shares worth Rs 4,253.70 crore, as per stock exchange data.
On the domestic macroeconomic front, the retail inflation rate breached the 6 per cent upper tolerance limit of the RBI for the first time in seven months in January, while the wholesale price index stayed in double-digits for the 10th month in a row.
“In the second half the rupee appreciated sharply after reports that some Russian troops are asked to return to its base after completing drills, a move that could de-escalate friction between Moscow and the West,” said Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services.
Somaiya added that “volatility could remain elevated for the next couple of sessions until we don’t get clarity on the situation. Market participants will be keeping an eye on the PPI number and a higher number could extend gains for the dollar.” Russia said on Tuesday that some units participating in military exercises would begin returning to their bases. Following the news, crude and dollar fell and equities rebounded, helping the domestic unit.
According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee appreciated against the US dollar on reports of a de-escalation in the conflict between Russia and Ukraine.
The unit strengthened by 0.4 per cent on Tuesday, its biggest single-session rise since January 31, Iyer said.
Markets will await producer prices and retail sales data and minutes from the US central bank’s January monetary policy meeting later this week, Iyer added. PTI DRR ABM ABM
