USD/INR: Positive Risk Sentiment Boosts Rupee

The positive risk sentiment weighs on the value of Rupee giving it a boost. At the interbank market, the value of Rupee appreciated by 19 paise settling up 0.27% at 70.68 against the US dollar. However, the USD/INR exchange rate was seen trading on Wednesday within a trading range of 70.95 and 70.63.

Emerging market currencies have seen some restrained market activity as a net result of easing trade tensions. However, the risks haven’t fully diminished, which is why currency traders remain cautious. The negotiations on the phase 2 deal between the US and China will weigh in next on the financial market. As a net result, the risk appetite will remain moderate.

The Phase two agreement between the world’s two most powerful economies in the world is expected to further ease the tensions between the US and China, according to US Secretary Steven Mnuchin.

“Just as in this deal there were certain rollbacks, in ‘phase two’ there will be additional rollbacks,” Mnuchin told CNBC. “The first step is really focusing on enforcement, but this gives China a big incentive to get back to the table and agree to the additional issues that are still unresolved,” said the US Secretary Steven Mnuchin – citing CNBC.

The dollar index, which gauges the greenback’s strength against a basket of major currencies, traded lower amid improved risk sentiment and settled down -0.19% at 97.21.

Elsewhere, foreign institutional investors (FIIS) were net buyers of shares in the local equity market worth Rs 279.53 crore; according to the National Stock Exchange of India data published at the end of Wednesday’s trading session. On the other hand, Domestic institutional investors were net sellers of equities worth Rs -648.34 crore.

The domestic benchmark equity index NIFTY 50 pared losses on Wednesday and settled at 12,343.30. However, during early Asia trading hours, NIFTY 50 reached a new all-time high was seen quoted at 12,389.05.

The Indian 10-year government bond yield was seen quoted at 6.61% in morning trade compared with its previous close of 6.63%.

Currently, one US dollar buys 70.79 Rupees, up 0.16% as of 8:10 AM UTC.

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