- Improvement in global risk sentiment and higher domestic equities helped lift the rupee against the US dollar
The Indian rupee rose sharply against the US dollar today as the risk sentiment improved in global markets. Opening at 76.30 per dollar, the rupee today further strengthened to 76.08 a dollar. In comparison, the rupee had closed at 76.66 per US dollar in the previous session after pulling back from record lows of 76.91 per US dollar.
“Facebook’s $5.5 billion acquisition of stake in Jio raised hopes that the FDI picture in FY21 will not be as bleak as earlier thought. Overall risk sentiment has improved overnight,” said Abhishek Goenka, founder and CEO of IFA Global.
“The focus will be on the EU meeting today to discuss stimulus measures to fight coronavirus. The discord between northern and southern countries is on the issuance of common debt. If an agreement is reached in the same it would give euro some boost,” he added.
Domestic equity markets, after a choppy start moved sharply higher amid a rally in other Asian stocks. Sensex was up about 400 points in noon trade.
Meanwhile, the dollar index, which gauges the greenback’s strength against the basket of six currencies, was trading 0.02 per cent up at 100.40.
Foreign institutional investors remained net sellers in the capital market, as they sold equity shares worth ₹1,326.09 crore on Wednesday, according to provisional exchange data.
Meanwhile, the dollar index, which gauges the greenback’s strength against the basket of six currencies, was trading 0.11% lower at 100.42.
The number of cases around the world linked to the new coronavirus has crossed over 26 lakh while in India, over 21,300 coronavirus cases have been reported so far.
Pullout by foreign portfolio investors remain a key risk factor for the rupee, which has so far this year outperformed other emerging market currencies.