Rupee Rises 10 Paise To 81.13 As Dollar Restrained Near A 16-Week Low

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Rupee Rises 10 Paise To 81.13 As Dollar Restrained Near A 16-Week Low

Rupee Today: Rupee gains against a retreating dollar

The rupee gained on Friday as the dollar was restrained near its 16-week lows as data on US consumer spending in October encouraged optimism that the peak in interest rates was on the horizon, and as investors eye the much-awaited jobs data later in the day.

After opening at 81.1338 per dollar, the rupee was last at 81.1275, compared to its previous close of 81.2188 on Thursday, according to Bloomberg.

“As rate hike expectations fall after Federal Reserve Chair Jerome Powell’s testimony overnight, the dollar has been in a free fall, helping Asian currencies gain,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.

PTI reported that the rupee gained 18 paise to 81.08 against the US dollar in early trade.

But forex traders said weak domestic equities and foreign fund outflows weighed on the local unit and restricted the appreciation bias.

While the rupee briefly touched 81 per dollar, a spot trader at a Mumbai-based bank told Reuters that it was not a surprise the rupee’s ‘upside momentum’ is running into a challenge at the 81 level.

The USD/INR pair has multiple support levels between 80.50 and 81 and one can expect ample dollar demand in that region, added the trader.

After reports indicated that US inflation was slowing and that manufacturing in the largest economy in the world shrank last month, the dollar index started December on the defensive, with it trading near Thursday’s low of 104.56, the lowest since August 11.

“The US dollar corrected by more than 5 per cent against major 6 peers in November- posted the worst monthly performance in 12 years. The major reason attributed to the same is the change in the tone from Fed members and the Chairman,” said Amit Pabari, Managing Director of CR Forex Advisors.

“And, since a high of 114.80 in late September, the US dollar index is down by 8.70% to trade at its lowest level since mid-August,” he added.

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