The rupee is down 6% against the US dollar so far this year
The rupee strengthened by as much as 30 paise - or 0.40 per cent - to 75.61 against the US dollar on Tuesday amid a mixed trend in Asian currencies. The rupee moved in a range of 75.61-75.79 during the four-hour session, having started the day at 75.77 against the greenback. Sharp gains in domestic equity markets and weakness in the dollar supported the rupee, according to analysts. The rupee ended at 75.64 against the US currency. At this level, the rupee is down 6 per cent against the greenback so far this year.
Domestic equity market benchmarks S&P BSE Sensex and NSE Nifty 50 jumped more than 2 per cent on Tuesday, rebounding after three straight sessions of downward movement.
Equities elsewhere in Asia were positive after a surge in Wall Street overnight, on optimism the global economy would recover quickly following a successful early-stage trial of a coronavirus vaccine.
Analysts say the rupee is likely to move sideways in the near term as investors assess the coronavirus-related announcements.
"Amid the mixed mood in the market, the rupee is likely to remain in dilemma for paving its further course. For the (rupee-dollar) pair, 74.80-76.20 is an important near term range and a sold trigger would be needed for a breakthrough," Amit Pabari, managing director at forex advisory firm CR Forex, said in a note.
"If the current range is broken, it will bring in a momentum of 80-100 paise in the pair," he said.
Crude oil prices were volatile, with brent crude - the global benchmark for crude oil - dropping 0.6 per cent to $34.62 per barrel, after earlier touching its highest since April 9.
The dollar index - which gauges the greenback against six peers - fell 0.25 per cent at the weakest level of the day, and was last seen trading down 0.23 per cent.
Currency markets currently operate within reduced trading hours due to the coronavirus-induced lockdown. The temporary timings are from 10 am to 2 pm, instead of the normal timings of 9 am to 5 pm.
