PremiumIndian rupee recorded a strong performance against the US dollar on Monday tracking a healthy rally in Asian counterparts. In percentage terms, the local unit witnessed its best upside in two months against the American currency. The greenback came under pressure after a better-than-expected US job report eased worries about the aggressive pace in policy stance by the US Federal Reserve going forward.
At the interbank forex market, the rupee finished at 82.36 against the US dollar. The rupee recorded the biggest 1-day upside since November 11 against the greenback. Last week, on Friday, the rupee stood at 82.72 per dollar.
Furthermore, Asian currencies garnered a rally after US nonfarm payroll expanded better than estimates alongside slow down in wage increases and a contraction in services activity which investors took as a positive factor for a smaller size rate hike from the Fed going forward.
Among Asian currencies, South Korea's won was in the lead of the rally.
As per US Bureau of Labor Statistics data, the country's total nonfarm payroll employment increased by 223,000 in December, and the unemployment rate edged down to 3.5%. Notable job gains occurred in leisure and hospitality, health care, construction, and social assistance.
Also, US services activity dropped for the first time in over two and half years to 49.6 in December from the previous month's 56.5.
Jayram Krishnamurthy, founder of Almus Risk Consulting said, "We have been hinting at the technical levels of 82.40 and 83.00 being decisive in the next directional move for the rupee," as reported by Reuters.
Krishnamurthy added in the report that a sustained move below 82.40 will boost the confidence of rupee bulls and it was likely the 82 levels could be challenged.
After three consecutive days of losing streak, Indian markets posted a bull run on Monday. Sensex rose by 846.94 points or 1.41% to close at 60,747.31. Nifty 50 climbed by 241.75 points or 1.35% to end at 18,101.20. India's volatility index dipped 2.5%.
Ahead, investors' focus now shifts toward US Federal Reserve's chair Jerome Powell's speech scheduled on Tuesday followed by inflation data of major economies like the US, China, and India.