Mumbai, Nov 18 (PTI) The rupee recovered from its all-time low level and settled with a gain of 4 paise at 84.42 against the US dollar on Monday, aided by a reduction in foreign funds’ selling activity and a retreating American currency.
Forex traders said, the recovery in the local unit was capped by the unabated withdrawal of foreign funds amid lacklustre sentiment in the domestic equity markets as well as an upward movement in crude oil prices.
At the interbank foreign exchange, the rupee opened at 84.42 and touched the intra-day high of 84.37 against the greenback during the session. It finally settled at 84.42 against the dollar, up 4 paise from its previous close.
On Thursday, the rupee fell 7 paise to settle at its all-time low of 84.46 against the US dollar.
The Forex market was closed on Friday on account of Guru Nanak Jayanti.
“This minor support for the rupee was further aided by a reduction in FII selling activity in recent days, with expectations that sell-off pressure will remain limited due to the upcoming state elections in Maharashtra.
“The rupee is expected to find support in the 84.45-84.52 range, while resistance is projected around 84.25-84.30,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.12 per cent at 106.56.
Brent crude, the global oil benchmark, rose by 1.76 per cent to USD 72.29 per barrel in futures trade.
“A slow and steady up-move is what the Reserve Bank of India (RBI) wants for the pair. It has sold USD 30 billion from its reserves to ensure that rupee stays well within the range and weakens gradually,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
On Tuesday, the rupee is expected to be in the same range of 84.35 to 84.55 with a steady weakness creeping into it, Bhansali added.
In the domestic equity market, the 30-share BSE Sensex declined 241.30 points, or 0.31 per cent, to close at 77,339.01 points, while Nifty fell 78.90 points, or 0.34 per cent, to settle at 23,453.80 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth Rs 1,403.40 crore, according to exchange data.
On the domestic macroeconomic front, India’s merchandise exports in October rose by an impressive 17.25 per cent year-on-year, highest in over two years, to USD 39.2 billion, while the trade deficit widened to USD 27.14 billion on a sequential basis, according to the latest government data released on Thursday.
Meanwhile, the country’s forex reserves dropped by USD 6.477 billion to USD 675.653 billion for the week ended November 8, the Reserve Bank of India said on Friday. PTI HVA DRR
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