On May 17, the rupee recovered from an intraday low of 77.79 to settle 7 paise higher thanks to a strong rally in local equity markets.
Due to a surge in crude oil prices and poor macroeconomic statistics, the local currency fell even more to its all-time intra-day low of 77.79. A significant rally in domestic stocks, on the other hand, helped the rupee recover and settle at 77.48 (provisional), up 7 paise from the previous closing of 77.55. Due to Buddha Purnima, the Forex market was closed on Monday.
US dollar against a basket of six currencies
The dollar index, which measures the strength of the US dollar against a basket of six currencies, dropped 0.41 percent to 103.75. The global oil benchmark, Brent crude futures, rose 0.74 percent to $115.09 a barrel.
“The Indian rupee fell on Tuesday as crude oil prices rose and macroeconomic data disappointed. The loss has been cushioned by the mild tone in the US Dollar and risk-on sentiments in global markets,” said Praveen Singh, AVP – Fundamental currencies and Commodities analyst, Sharekhan by BNP Paribas.
In April, wholesale price-based inflation hit a new high of 15.08 percent, owing to rising food, fuel, and other commodity costs, which may push the Reserve Bank to raise interest rates at its next monetary policy review next month.
The dollar fell against a backdrop of rising risk assets and dismal economic data.
“However, fragile risk attitudes and fears about the global economy’s recovery could limit strong upside.” Tensions over the Ukraine conflict could weigh on the rupee, Mr. Singh said, adding that the rupee could trade in the 76.80-78.30 area in the coming days.
India’s merchandise exports increased 30.7 percent to $40.19 billion in April, according to the Commerce Ministry, owing to strong performance in sectors such as petroleum products, electronic goods, and chemicals, despite a $20.11 billion trade deficit.
The BSE Sensex rose 1,344.63 points, or 2.54%, to 54,318.47, while the broader NSE Nifty rose 417.00 points, or 2.63 percent, to 16,259.30.
According to stock exchange data, foreign institutional investors were net sellers in the capital market on Monday, offloading shares worth Rs 1,788.93 crores.