USD/INR: A Reverse in Risk Sentiment Boosts Rupee

Indian Rupee benefited from a reverse in risk sentiment and appreciated against the greenback. At the currency market, the value of Rupee appreciated by 24 paise settling up 0.33% at 71.19 against the US dollar. However, the USD/INR exchange rate was seen trading within a trading range of 71.44 and 71.16.

US Dollar

The US stocks are leading the charge as risk appetite has improved over the past 24 hours. On Wall Street, the Dow Jones Industrial Average gained traction and closed higher 0.66%, gaining 187.05 points after it settled at 28,722.85. At the same time, the S&P 500 index rose 1% to 3,276.25.

The markets are still not out of the woods as the coronavirus outbreak in China will continue to weigh in and do further damage to risk assets.

“While the coronavirus outbreak is an unexpected risk factor that could move the markets if the situation deteriorates, and comparisons to the 2003 outbreak of severe acute respiratory syndrome (SARS) have been widespread, there are important differences,” said Joyce Chang, chief of global research at J.P. Morgan – citing Market Watch.

The dollar index, which gauges the greenback’s strength against a basket of major currencies, settled mildly higher 0.03% at 97.96. Currency traders are eyeing the Fed interest rate, which will be followed by Powell’s press conference.

Indian Rupee

Elsewhere, foreign institutional investors (FIIS) were net sellers of shares in the local equity market worth Rs -1357.56 crore; according to the National Stock Exchange of India data published at the end of Friday’s trading session. On the other hand, Domestic Institutional Investors (DIIs) were net buyers of equities worth Rs 711.7 crore.

The domestic benchmark equity index NIFTY 50 fell for the second day on Tuesday and settled down -0.52% at 12,055.80. However, during early Asia trading hours on Wednesday, NIFTY 50 gapped higher and was seen quoted at 12,161.65.

The Indian 10-year government bond yield was seen quoted at 6.58% in morning trade compared with its previous close of 6.58%.

Currently, at the interbank market, one US dollar buys 71.18 Rupees, down -0.01% as of 7:55 AM UTC.

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