Rupee steady at 66.71; exit polls result eyed

Overall forex market sentiment turned extremely bearish and displayed some signs of exhaustion in view of key macroeconomic data releases including the IIP and inflation data.

By: PTI | Mumbai | Published:March 9, 2017 7:26 pm
rupee, elections, exit poll, rupee us dolar, us dollar, market, market news, business news, indian express news Burgeoning capital inflows into the booming Indian economy backed by strong macro environment largely supported home currency to stay afloat.

The rupee ended virtually unchanged at 66.71 against the US dollar as traders avoided taking any positions ahead of the exit polls outcome and concerns over an impending Fed rate hike.

Overall forex market sentiment turned extremely bearish and displayed some signs of exhaustion in view of key macroeconomic data releases including the IIP and inflation data.

Growing confidence that the Federal Reserve will raise interest rates at its upcoming policy meeting next week also weighed on trade even impacting other Asian and emerging market currencies.

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Burgeoning capital inflows into the booming Indian economy backed by strong macro environment largely supported home currency to stay afloat.

Foreign funds bought shares net Rs 3,573.04 crore on Wednesday as per the provisional figures from exchanges.

Meanwhile, crude prices witnessed its steepest fall in more than a year with the West Texas Intermediate benchmark crumbling below the psychological USD 50-mark for the first time since December on renewed concerns about a supply glut.

The domestic currency resumed lower at 66.81 compared to Wednesday’s closing value of 66.71 at the Interbank Foreign Exchange (forex) market on renewed demand for the American currency from importers and banks.

It largely moved in a tight range of 66.70 and 66.87 throughout the day before ending little changed at 66.71.

The rupee had weakened 4 paise on Wednesday. On the global front, the greenback traded marginally weak against its major rivals ahead of the looming ECB meeting later in the day and US jobs data.

Robust US private-sector payrolls data on Wednesday further cemented expectations for the Federal Reserve to raise interest rates next week. The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was trading lower at 102.08.

The RBI fixed the reference rate for the dollar at 66.7707 and for the euro at 70.3229. In cross-currency trade, the rupee however fell back against the British pound and ended lower at 81.10 from 81.03 and also softened against the euro to settle at 70.43 from 70.42.

But, it remained firm against the Japanese Yen and finished higher at 58.21 per 100 yens from 58.49 earlier. Meanwhile, Indian equities made a small rebound after two-day selling pressure on select buying in key frontline stocks even as Asian shares painted a mixed picture amid bearish cues overnight from Wall Street.

The benchmark Sensex rebounded over 27 points to end at 28,929.13, while broader Nifty gained 2.70 points to 8,927. In the forward market, premium for dollar remained sluggish owing to sustained receivings from exporters. The benchmark six-month premium for August dropped to 146-148 paise from 151-153 paise and the far-forward February 2018 contract also declined to 298-300 paise from 305-307 paise on Wednesday.

On global commodity front, crude prices tumbled to hit multi-month lows after US government data overnight showed that US inventories had risen to a record high of 8.2 million barrels as production continued to creep higher.

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