Forex

Rupee retreats by 11 paise to 72.83, ends 2-day winning run

PTI Mumbai | Updated on March 04, 2021

The rupee on Thursday declined by 11 paise to close at 72.83 against the US dollar due to a rebound in the greenback in overseas markets and muted domestic equities.

At the interbank forex market, the local unit opened at 72.99 against the greenback and witnessed an intra-day high of 72.62 and a low of 72.99.

It finally ended at 72.83 against the American currency, registering a fall of 11 paise over its previous closing. On Wednesday, the rupee had settled at 72.72 against the American currency.

The rupee depreciated for the first time in three sessions as the US dollar continued to move higher, said Sriram Iyer, Senior Research Analyst at Reliance Securities.

The Dollar Index was trading with gains on Thursday as a rise in US Treasury yields lent support ahead of a speech by Federal Reserve Chairman Jerome Powell tonight that could determine the trend for global bond markets and currencies, Iyer said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.27 per cent to 91.19.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,088.70 crore on Wednesday, according to exchange data. According to Dilip Parmar, Research Analyst, HDFC Securities, Indian rupee dropped after a two-day winning streak as the dollar index hovered near a one-month high.

"However, with the softer dollar environments and strong dollar inflows are in place, the risk is skewed for higher rupee. Short term traders should do a level playing game as market volatility expected to remain high in March following financial year ending," Parmar said.

Markets expect Powell will repeat that the Fed is patient and will not tighten monetary policy prematurely.

"Rupee had a volatile day today as it fell in the first half of the session but gained in the latter half following recovery in domestic equities. Market participants remain cautious ahead of the important non-farm payrolls number that will be released from the US tomorrow," Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Published on March 04, 2021

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