Rupee Gains To 73.85 Against Dollar As Traders Trim Dollar Long Positions

Rupee Vs Dollar Today: At the interbank forex market, the domestic unit opened at 73.83 and registered an intra-day high of 73.76.

The rupee rose for the second consecutive day gaining 10 paise against the US dollar on Tuesday, May 4, to settle at 73.85 amid dollar selling by traders. Also, high crude oil prices and losses in domestic equities restricted the gain for local unit today. At the interbank forex market, the domestic unit opened at 73.83 and registered an intra-day high of 73.76. It witnessed a low of 73.97. In an early trade session, the local unit gained 13 paise to 73.82 against the greenback. On Monday, May 3, the local unit settled at 73.95 against the dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.42 per cent to 91.33.

”The USD/INR pair started the day slightly higher at 73.87, up 17 paisa against USD from Monday’s close. The currency pair fell sharply from a high of 75.32 made on 22-4-2021 and fresh low 73.87 today, despite regular covid cases crossing the 3,00,000 mark for the 10th consecutive day,” said Kshitij Purohit, Lead International Products & Commodities at CapitalVia Global Research Limited.

”An increase in the rupee exchange rate above the 74.00 level will be unsustainable in the current situation, and a swift recovery to the 74.50 plus level is expected in the coming sessions,” added Mr Purohit.

”There is an excess of $ supply causing the disruption in cash premiums going as high as 16%. So exporters and others sold dollar and from a high of 74.32 Rupee rose to 73.85. Today if the same scenario prevails then we may again see the sell-off. RBI  may have to step in to control the absurd cash and premiums levels,” said Anil Kumar Bhansali, Head of Treasury, Finrex.

On the domestic equity market front, the BSE Sensex ended 465.01 points or 0.95 per cent lower at 48,253.51, while the broader NSE Nifty slipped 137.65 points or 0.94 per cent to 14,496.50.

‘Benchmark indices fell for the second times in three days on May 04, following concerns over FPI selling in the recent past and further action expected to combat the Covid situation….Volumes on the NSE were higher than recent averages suggesting that the buying by domestic institutions was subdued while Retail and HNI started to take profits as is evident from the negative advance-decline ratio,” said Mr. Deepak Jasani, Head of Retail Research, HDFC Securities.

”The market is not stabilizing at any specific level, which is an indication of some more uncertainties in the near term. The Nifty/Sensex closed below the level of 14500/48300 that would keep open the possibilities of hitting  14400/14370 (48000/47900) levels, however, it is crucial for the market to close above the levels of 14450/48100 to maintain the upward bias,” said Shrikant Chouhan, Executive Vice President (Equity Technical Research), Kotak Securities.According to exchange data, the foreign institutional investors were net sellers in the capital market on May 3 as they sold shares worth ₹ 2,289.46 crore. Brent crude futures, the global oil benchmark, rose 1.81 per cent to $ 68.78 per barrel.