Rupee Gains Higher To Settle At 72.75 Against Dollar Ahead Of Consumer Inflation Data

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The rupee gained 12 paise against the US dollar on Friday, February 12,  to settle at 72.75 (provisional), ahead of the release of key macro-economic data — consumer inflation and industrial production, amid sustained foreign capital inflows. At the interbank foreign exchange market, the domestic unit opened at 72.79 against the dollar and registered an intra-day high of 72.75. It registered a low of 72.83. The local unit closed at 72.75 against the American currency, registering a rise of 12 paise from its previous close. On Thursday, February 11, the domestic unit finished at 72.87.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.20 per cent to 90.60. The rupee witnessed a volatile session throughout the week amid changing trends in domestic equities. It declined marginally to close at 72.87 on Thursday and settled on a flat note on Wednesday. While on Tuesday, it gained marginally even as domestic equities restricted gains. 

“Rupee gained strength amid softening of crude oil prices and steady FII inflows. Additionally, expectation of improved macro-economic data supported Rupee,” said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas. “CPI data is likely to show that inflation eased and remained under RBI target range of 2-6 per cent in January 2020. However, sharp gains were prevented on strong Dollar. Rupee may trade in the range of 72.50 to 73.20 in next couple of sessions,” he added.

According to forex traders, the market participants will be keeping an eye on inflation and industrial production numbers and better-than-estimate numbers could extend gains for the currency. 

”Good risk appetite coupled with inflows into local stocks will help Indian Rupee to appreciate, but likely RBI intervention at around 75.70-72.60 zone may limit the fall in USDINR pair. We expect USDINR Spot to trade sideways with negative with 72.65/72.50 being key support zone below which next support is at 72.30. On the upside, 73.0-73.15-73.25 will act as the crucial resistance levels,” said Rahul Gupta, Head Of Research-Currency, Emkay Global Financial Services.

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On the domestic equity market front, the BSE Sensex ended 12.78 points or 0.02 per cent higher at 51,544.30, while the broader NSE Nifty slipped 10 points or 0.07 per cent to 15,163.30.