Image Source : PTI (FILE IMAGE) Rupee recovers from record low, spurts 12 paise to 78.10 per US dollar HighlightsRupee recovered from its record low to close 12 paise higher at 78.10 against US dollar The dollar index fell from its elevated levels by 75 basis points Brent crude futures, the global oil benchmark, slipped 0.25 per cent to USD 118.21 per barrel The rupee recovered from its record low to close 12 paise higher at 78.10 against the American currency on Thursday, tracking the overnight weakness of the dollar and falling crude oil prices. The dollar index fell from its elevated levels after the Federal Reserve raised interest rates by 75 basis points in a historic move to fight inflation and projected a slowing economy and rising unemployment in the months to come, traders said. At the interbank forex market, the rupee opened at 78.06 against the greenback and moved in a narrow range of 78 to 78.12. It finally ended at 78.10, higher by 12 paise over its previous close. On Wednesday, the rupee had plunged 18 paise to close at its fresh lifetime low of 78.22. The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.13 per cent to 105.02. Brent crude futures, the global oil benchmark, slipped 0.25 per cent to USD 118.21 per barrel. “Even after higher trade deficit numbers, weaker regional currencies and risk-averse sentiments, the rupee got support from the fall in crude oil prices,” said Dilip Parmar, Research Analyst, HDFC Securities. India’s merchandise exports in May rose by 20.55 per cent to USD 38.94 billion, while the trade deficit ballooned to a record USD 24.29 billion, according to the government data released on Wednesday. Parmar further noted that some relief rally in the rupee in the near-term is likely but odds of 78.50 are very much alive. “As the FOMC event is over, the focus will shift back to fund flows and risk moods for rupee movements,” Parmar said, adding that spot USD-INR is expected to consolidate in the range of 77.70 to 78.30 before heading north. On the domestic equity market front, the BSE Sensex ended 1,045.60 points or 1.99 per cent lower at 51,495.79, while the broader NSE Nifty plunged 331.55 points or 2.11 per cent to 15,360.60. Foreign institutional investors remained net sellers in the capital market on Thursday as they offloaded shares worth Rs 3,257.65 crore, as per stock exchange data. “The Indian rupee ended steady, after trading in a small range against the dollar. Dollar purchases by importers capped potential gains for the local currency, but Asian currencies gained and capped depreciation bias for the local unit,” said Sriram Iyer, Senior Research Analyst at Reliance Securities. The US Dollar Index rebounded from the low in European trade, maintaining a positive tone as traders digested the Federal Reserve’s policy decisions. According to Jateen Trivedi, VP Research Analyst at LKP Securities, the rupee traded firm near 78.10 as WTI Crude prices have dropped strongly from USD 125 and are now below USD 118 in Brent, giving relief to rupee buyers. “The US Fed hiked rates by 0.75 per cent. The statement from the Fed seemed hawkish as it indicated further rate hikes till the time inflation is not in control,” Trivedi said, adding that “the rupee broadly still seems to be in weakness till the time 77.50 is not crossed.” Also Read | Rupee slips 13 paise to close at all-time low of 78.17 against US dollar Latest Business News
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