Indian Rupee: Weak Dollar Likely To Support

Indian Rupee: Weak Dollar Likely To Support

Sep 18, 2020 08:09 IST capital market

Mounting worries surrounding India-China border tensions coupled with rising coronavirus cases in the country is seen dampening rupee sentiments. Meanwhile, weakness in the US dollar overseas could lend some support to the rupee. On Thursday, rupee depreciated 14 paise and settled at 73.66 against the US dollar. At the interbank forex market, the local unit opened on a weak note at 73.70, and finally closed at 73.66 against the American currency, registering a fall of 14 paise over its last close. During the session, the domestic unit witnessed an intra-day high of 73.64 and a low of 73.78 against the greenback. On Wednesday, the rupee had strengthened by 12 paise to 73.52 against the US dollar.

Domestic benchmark indices snapped a two-day rising streak on Thursday, tracking weak global cues. The S&P BSE Sensex lost 323 points or 0.82% at 38,979.85. The Nifty 50 index fell 88.45 points or 0.76% at 11,516.10. Foreign portfolio investors (FPIs) sold shares worth Rs 249.82 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 1,067.83 crore in the Indian equity market on 17 September, provisional data showed.

Overseas, Asian stocks are trading mostly higher on Friday. The World Health Organizations (WHO) regional director for Europe on Thursday warned of a ?very serious situation? unfolding in Europe. Weekly cases have now exceeded those reported when the pandemic first peaked in Europe in March, said WHOs Hans Klug.

In US, stocks fell on Thursday as technology-related shares slid for a second day. Facebook and Amazon were down 3.3% and 2.3%, respectively. Netflix closed 2.8% lower. Alphabet dropped 1.7% while Apple and Microsoft were both down at least 1%. Snowflake, an IPO which captivated Wall Street on Wednesday as it doubled in its debut, was off by 10.4%.

US President Donald Trump said late Wednesday that the U.S. could distribute a vaccine as early as October, contradicting the director of the Centers for Disease Control and Prevention, who told lawmakers earlier in the day that vaccinations would be in limited quantities this year and not widely distributed for six to nine months.

In Europe, the Bank of England kept its main interest rate unchanged at the record low of 0.1% on Thursday as it gauges the strength of the economys recovery from recession and what the U.K.s future trade relationship with the European Union will be. The rate-setting Monetary Policy Committee, which sets policy for the U.K. as a whole, said the outlook for the economy remains unusually uncertain in light of the recent spike in coronavirus infections and questions over the trading relationship with the EU from the start of next year.

Meanwhile, the dollar index, which gauges the greenbacks strength against a basket of six currencies, fell to 92.94.

Powered by Commodity Insights

Related Story