Indian rupee jumped sharply against the US dollar today amid an improvement in global risk sentiment which has driven equities to three-month highs. The rupee today rose to 75.01 against the US dollar tracking positive domestic equities and gains in other Asian currencies. However, rupee later pared some gains and traded at 75.20 as compared to the previous close of 75.36.
“Kotak QIP and Reliance rights issue related inflows caused a sharp selloff in USD-INR towards the end of session on Tuesday. USD continues to weaken globally against developed market and emerging market currencies. Overall risk sentiment is positive. So far there are no signs of a second wave despite economies opening up in Europe and the US,” said Abhishek Goenka, founder and CEO of IFA Global.
The US dollar index, which gauges the greenback’s strength against a basket of six currencies, fell by 0.28% to a two-month low of 97.38.
“Sharp upswing in global as well as domestic equities has worked to fuel significant upside in the Indian rupee. Sentiments have got a boost on gradual unlocking of the domestic economy. Markets are now pinning their hopes on global recovery and shrugging off concerns about the deepening rift between US and China. As of now, near term bias for the local unit is positive, where it can edge higher towards 74.80 mark,” Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking, said in a recent note.
Meanwhile, in India, the the number of the number of coronavirus infections rose to 2.07 lakh while recoveries have also risen past one lakh mark.
On the equities front, Sensex was trading over 400 points higher in early noon trade.
Foreign institutional investors were net buyers in the capital market, as they bought equity shares worth ₹7,498.29 crore on Tuesday, according to provisional exchange data.