The rupee reversed gains from early trade on Tuesday following a broad risk-asset rally following a significant change in British fiscal policy, fueling investor optimism, with the domestic currency closing nearly flat in a fag- With and sell.
According to Bloomberg, after the dollar opened at 82.2087, taking a sigh of relief, the rupee was last at 82.3362 per dollar.
PTI reported that the domestic currency fell 6 paise to temporarily close at 82.36 against the US dollar.
Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors, said, “After opening at 82.20, the rupee made a high of 82.02 and soon settled at 82.32 as oil companies and importers took advantage of the low levels to buy dollars.”
The rupee rose from 82.35 in the previous session when it traded in the nearly six-paise range, resembling the steady trading pattern seen in the past week as the Reserve Bank of India protected the currency from severe depreciation after repeated falls Was. Lowly.
However, analysts caution that the rupee may face a tough future.
Indeed, beyond the recent trading session, the rupee has fallen dramatically – reflected in a 52-week range of 73.7787 to 82.6950 per dollar, down nearly 10.8 per cent for the year, with further downside in the near term. suggests the possibility.
“Despite a turbulent ride in global markets, despite seeing calm and control in rupee over the past few sessions amid RBI intervention, there may be an urge to wait for a stronger rupee to think; is it reversed in rupee and bet otherwise ?” Amit Pabri, Managing Director, CR Forex Advisors said.
“Whoever believes that RBI is patting us on our back and resting will remember the last episode when the rupee went from 80 to 78.50 in 3 sessions and from 82 to make a new high after a brief consolidation. had jumped up. A calm and long calm after a storm indicates an approaching storm.”
“We reiterate until the global volatility subsides and the trend reverses, the pressure on the rupee will however remain in the gap, and the pair is poised to move towards 83.00-83.50 levels in a few days, Said Mr. Pabri.
The dollar index, which measures the greenback against six of its major rivals including the yen, euro and sterling, fell to 1-1/2-week lows as European currencies strengthened due to a sharp U-turn. The divisive tax-cut “mini-budget.”
British Prime Minister Liz Truss’s economic strategy was largely rejected by the country’s new finance minister, Jeremy Hunt.
Mr Hunt’s decision led to rises in UK government bonds, currencies and stocks, boosting Wall Street and global risk assets.
Asian currencies were mostly flat or lower, despite an overnight decline in the dollar index and risk-on sentiment.