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Rupee closes flat at 73.35 in restricted trade

Mumbai, Oct 16 : The rupee on Friday settled almost flat at 73.35 against the US dollar in the absence of any fresh trigger. At the interbank forex market, the rupee opened at 73.41 against the greenback and moved in a narrow range during the day in lacklustre trade. The rupee closed at 73.35, higher by just 1 paisa from its previous close of 73.36.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.16 per cent to 93.70. “There are no fresh cues in the market to react to and that is why we are seeing USD/INR spot consolidating in between 73-73.60. Somewhere market has factored in a likelihood of no US stimulus package before the election but knowing Trump, we cannot rule out the fact that he may release some deal next week,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

Sriram Iyer, Senior Research Analyst at Reliance Securities, said that the Indian rupee appreciated marginally in lacklustre trade, tracking weak US dollar. Asian currencies were mostly stronger this Friday and lent support to the domestic unit, with the Offshore Chinese Yuan appreciating by 0.25 per cent against the US dollar, Iyer stated. The one-year forward premium was at 3.01 rupees, against 3.03 rupees in the previous session.

Devarsh Vakil, Deputy Head Retail Research, HDFC Securities said that the rupee got support from the weaker dollar and rebound in the global equities after sharp sell off on Thursday. On the domestic equity market front, the BSE benchmark Sensex closed 254.57 points or 0.64 per cent higher at 39,982.98.The NSE gauge Nifty settled 82.10 points or 0.70 per cent up at 11,762.45. Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 604.07 crore on a net basis on Thursday, according to exchange data. Brent crude futures, the global oil benchmark, fell 0.58 per cent to USD 42.91 per barrel.

On weekly basis, the rupee dropped by 19 paise or 0.26 per cent. The currency depreciated against the US currency this week, weighed down by broad dollar strength and the risk-off mood in Asia on continuing uncertainty over the US fiscal stimulus package. Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services said, “Rupee consolidated in a narrow range for the whole of this week despite volatility in domestic and global equities. Talks over stimulus package in the US and Brexit uncertainty kept most market participants on the edge. “On the domestic front, lack of cues kept the volatility low for the currency.

In the next few sessions global cues will be influencing more to the rupee as compared to the domestic cues. We expect USDINR (Spot) to quote with a positive bias and in the range of 73.05 and 73.50.”

SourcePTI

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