The Indian rupee surged 31 paise to close at 74.03 (provisional) against the US dollar on Monday amid robust buying in domestic equities. At the interbank forex market, the local unit opened at 74.15 against the US greenback and witnessed an intra-day high of 74.03 and a low of 74.21 before finally settling at 74.03, a rise of 31 paise over its previous close. The domestic currency on Monday strengthened to its highest level in nearly two months supported by dollar inflows. Meanwhile, the benchmark 10-year bond yield hit fresh 2-year highs on the back of uptick in US Treasury yields and global crude oil prices. In the previous session on Friday, the rupee had settled at 74.34 against the US dollar. The dollar index, which measures the strength of the greenback against a basket of six currencies, increased 0.19% to 95.90.
Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee rose following broad weakness in the dollar against its major crosses and gains in domestic equities. Market participants remain cautious ahead of the important inflation and industrial production number that will be released on the domestic front later this week. An uptick in inflation and slower growth in industrial production could weigh on the rupee. Yesterday, in the US session, the dollar rose on expectation that the Fed would raise rates as early as March. At the same time, the greenback extended gains as the benchmark U.S. 10-year Treasury yield rose to its highest level in almost two years.”
