Indian Rupee: Likely To Extend Recovery

29 Jul 2022 , 09:27 AM

Sustained weakness in the US dollar coupled with foreign funds resuming buying in Indian shares is expected to keep the Indian rupee supported on Friday. The dollar index is currently down nearly 0.3% below 106 mark while benchmark treasury yields are approaching 2.7%. The Indian rupee appreciated 22 paise to close at 79.69 (provisional) against the US dollar on Thursday. At the interbank forex market, the local unit opened at 79.80 against the greenback and finally settled at 79.69 (provisional), registering a rise of 22 paise over its previous close. During the session, the local unit witnessed an intra-day high of 79.64 and a low of 79.85 against the American currency. On Wednesday, the rupee declined 13 paise to close at 79.91 against the US dollar. Domestic benchmark indices ended with stellar gains on Thursday, tracking positive global cues. The barometer index, the S&P BSE Sensex, jumped 1,041.47 points or 1.87% to 56,857.79. The Nifty 50 index surged 287.80 points or 1.73% to 16,929.60. Foreign portfolio investors (FPIs) bought shares worth Rs 1,637.69 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 600.29 crore in the Indian equity market on 28 July, provisional data showed. Overseas, Asian stocks are trading mixed Friday after a rally on Wall Street. That followed a negative US gross domestic product report, which suggests the Fed would be less aggressive in its tightening cycle. US stocks on Thursday rallied for a second day, with all three major indices ending up more than 1% as data showing a second consecutive quarterly contraction in the economy fueled investor speculation the Federal Reserve may not need to be as aggressive with interest rate hikes as some had feared. The US economy shrank from April through June for a second straight quarter. U.S. economic growth fell 0.9% in the second quarter, the Bureau of Economic Analysis reported Thursday. First-quarter GDP declined by 1.6%. President Joe Biden insisted Thursday that the US economy was on the right path, with solid job growth, despite a second straight quarter of contraction that has deepened fears of a recession. Powered by Commodity Insights