Rupee gains to 75.58 against a softer dollar
The rupee gained sharply on Friday and extended its weekly winning streak for the second week in a row as the dollar retreated from two-decade highs as investor sentiment improved even as aggressive rate hike path by major central banks clouded the global rally in risk assets.
PTI reported that the Indian currency rose 13 paise to close provisionally at 79.56 against the US dollar.
Bloomberg showed the rupee was last changing hands at 79.5838 per dollar, after opening stronger at 79.6288 compared to Thursday’s close of 79.7175.
The Indian currency hit a one-month high of 79.57 earlier in the day and closed out the week with gains of about 0.2 per cent, which was its best performance in seven weeks.
The weekly strength also marks the second straight week of gains for the domestic currency.
The rupee appreciated on positive domestic equities and a weak US dollar. The dollar declined by more than 1 per cent on a sharp bounce amid an unprecedented 75 basis points (bps) rate hike by the European Central Bank (ECB) to 1.25 per cent, Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, told PTI.
“Global inflationary pressures may also put pressure on riskier assets. However, weakness in dollar and positive cues from global markets may support Rupee at lower levels,” Mr Choudhary said. “The USD-INR spot price is expected to trade in a range of Rs 79 to Rs 80.30 in the next couple of sessions,” he added.
But analysts in a Reuters report said, India faces the risk of losing its export advantage as the rupee holds ground amidst a rapid weakening of other Asian currencies.
A broad rally in risk assets pushed the dollar lower, with the US currency heading for its first weekly decline in four weeks as investors eyed the US inflation data early next week.
Indeed, the dollar index, which compares the greenback’s performance against six major counterparts, fell 1 per cent on Friday and traded at 108.400. The currency lost territory overall and was set for a weekly decline of 1.1 per cent, the first fall in a month or so.
That even as Federal Reserve Chair, Jerome Powell, confirmed an aggressive policy path.
the strongest suggestion yet from Japanese officials about potential direct market intervention in reaction to the yen’s weakness sent the currency on its way to its best day in a month.
Among the big gainers was the euro, which leapt 1.1 per cent to a three-week high of $1.01105, a day after the ECB hiked its key rate by a record 75 bps and hinted at more to come.
At the dollar’s expense, even bruised cryptocurrencies rose, with bitcoin back above $20,000 and up 7 per cent.
Indian domestic equities gained on Friday, with the Sensex closing below the 60,000-mark after hitting that level earlier in the session.
