Snapping its three-day winning streak, the rupee declined 10 paise against the US dollar on Wednesday, July 14, to settle at 74.59 (provisional) as the American currency strengthened after the US inflation data. At the interbank foreign exchange market, the local unit opened at 74.57 against the dollar and dropped further to reach the 74.50 levels. In an early trade session, the domestic unit fell 10 paise to 74.59 against the greenback.
On Tuesday, July 13, the local unit settled at 74.49 against the American currency. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.05 per cent to 92.70.
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities:
“It was a day of lackluster trading as USDINR closed barely 5 paise higher on July futures at 74.65 and 9 paise higher on spot at 74.58. FPI selling capped the upside.
Over the next two days, FPI flows in the ongoing ZOMATO IPO can be a negative factor for USDINR. However, we expect RBI to intervene at lower levels. A range of 74.30-74.85 is expected over the next couple of days.”
”Globally, the safe heaven dollar edged higher to 92.72 levels, trading at 3-month highs after data showed the US inflation rate hit a new 2008-high of 5.4 per cent in June, well above market expectations of 4.9 per cent. This led the yield on the US 10-year Treasury note to jump to as high as 1.418 per cent which was supportive to dollar,” said Mr Amit Pabari, MD, CR Forex.
”Domestically, so far rising crude oil prices and firm dollar strength have weighed on the rupee. The momentum in the USDINR pair has turned like a roller coaster ride, where global pressure could push the pair towards 74.90 levels while any steep fall can get capped on account of a channel of IPO’s lined up in coming sessions.
As the overall sentiments remain cautious, momentum in the rupee could also be trapped within its present narrow range of 74.50-74.90 levels before any big market trigger takes it towards 75.20-75.50 levels in the upcoming time,” he added.
On the domestic equity market front, the BSE Sensex ended 134.32 points or 0.25 per cent higher at 52,904.05, while the broader NSE Nifty climbed 41.60 points or 0.26 per cent to 15,853.95.
“Nifty has been consolidating in a narrow range since the past few trading sessions. The medium term view remains positive with buying on dips advisable. For the short term, consolidation expected to continue with resistance seen at 15980 levels. Realty and NBFC stocks expected to trade with a positive bias,” said Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities.
“The Nifty Technology index had a marvellous run and erased the losses of the last 13 days by closing above the highest level of the previous up move. While the Nifty index logged gains, the Bank Nifty remained on the back foot and lost 200 points from the highs. It was the third attempt of the Bank Nifty to surpass the levels of 35810, which failed,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
”On Thursday, on the day of the weekly expiry of Index options and the quarterly results of the index giant Infosys, we would see the levels of 15950/53200 in the near term in case the Nifty/Sensex survive above the levels of 15800/52700,” he added.
According to exchange data, the foreign institutional investors were net buyers in the capital market on July 13 as they purchased shares worth Rs 113.83 crore. Brent crude futures, the global oil benchmark, fell 0.75 per cent to $ 75.92 per barrel.