The rupee appreciated by 7 paise to 73.10 against the US dollar in opening trade on Wednesday, as positive domestic equities and the American currency trading lower in the overseas market lifted investor sentiment.
At the interbank forex market, the domestic currency opened at 73.11 against the US dollar and inched higher to 73.10 against the greenback, registering a rise of 7 paise over its previous close. On Tuesday, the rupee had settled at 73.17 against the American currency. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.14 per cent to 90.37. “The US Dollar Index is trading marginally lower this Wednesday morning in Asian trade after big spending talk from US Treasury Secretary nominee Janet Yellen,” Reliance Securities said in a research note.
Meanwhile, markets will await the Reserve Bank of India’s open market operation on Thursday. The RBI will conduct an outright OMO worth Rs 100 billion on Thursday, in which it will buy the 2024, 2027 papers along with the benchmark bond, the note added. Traders further said the investor focus would be on US President Joe Biden’s inauguration ceremony. The Euro and the Sterling were flat to marginally higher against the US Dollar this Wednesday morning in Asian trade.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 185.11 points higher at 49,583.40, and the broader NSE Nifty was up 58.30 points at 14,579.45. Foreign institutional investors (FIIs) were net buyers in the capital market as they purchased shares worth Rs 257.55 crore on a net basis on Tuesday, according to provisional exchange data. Brent crude futures, the global oil benchmark, rose 0.59 per cent to $56.23 per barrel.
Unemployment rate in the US has risen to 14 per cent in a few weeks due to the coronavirus crisis with more than 30 million unemployed, even if at the beginning of 2020 it was at an all-time low for the last 50 years. Just as the Fed’s fiscal and monetary response reduced the federal budget from $7.2 to $4 trillion in just a few months.