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Updated August 11th, 2020 at 17:58 IST

Rupee settles 12 paise higher at 74.78 against US dollar

The rupee appreciated by 12 paise to close at 74.78 against the US dollar on Tuesday tracking weakness in the greenback and gains in the domestic equity market.

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The rupee appreciated by 12 paise to close at 74.78 against the US dollar on Tuesday tracking weakness in the greenback and gains in the domestic equity market.

Forex traders said gains in the domestic currency were supported by foreign fund inflows into domestic equity and debt markets.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 302.88 crore on Monday, according to provisional exchange data.

At the interbank forex market, the local unit opened at 74.83 against the US dollar and gained further ground to settle at 74.78, up 12 paise over its previous close of 74.90.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.13 per cent lower at 93.46.

Market participants will track Index of Industrial Production (IIP) numbers scheduled to be released later in the day for further cues, they said.

After touching a high of 38,556.27, the 30-share BSE Sensex pared some gains to end 224.93 points or 0.59 per cent higher at 38,407.01. The NSE Nifty jumped 52.35 points or 0.46 per cent to finish at 11,322.50.

Brent crude futures, the global oil benchmark, rose 0.47 per cent to USD 45.20 per barrel.

"Indian rupee gained in line with other Asian currencies amid weakness in dollar," HDFC Securities Deputy Head Retail Research, Devarsh Vakil said.

Markets will keep an eye on US-China headlines, after tensions between the two countries heated up again with China putting sanctions on some US officials in retaliation for the Hong Kong dispute, Vakil said.

China has announced unspecified sanctions against 11 US politicians and heads of organisations. The two sides are scheduled to hold virtual trade talks at the end of the week.

"Rupee expected to add gains as foreign fund inflows pour in. Technically, spot USDINR is having strong support near 74.50 and resistance at 75.50," Vakil said.

Further news that US President Donald Trump plans to cut taxes on capital gains and on middle income earners boosted market sentiments, traders said.

"The Indian Rupee appreciated against the US Dollar on Tuesday and logged its best day against the dollar in three weeks, tracking buoyant risk appetite in the region due to positive expectations on the fiscal stimulus deal and in anticipation of more dollar equity portfolio flows," said Sriram Iyer, Senior Research Analyst, Reliance Securities.

Asian currencies gained on hopes that a US fiscal stimulus would support a quicker rebound in the world's largest economy. This also supported our domestic unit, Iyer noted.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 74.8780 and for rupee/euro at 88.3276. The reference rate for rupee/British pound was fixed at 97.8411 and for rupee/100 Japanese yen at 70.79.

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Published August 11th, 2020 at 17:58 IST

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