Other Asian currencies also gained against US dollar
The rupee, on Tuesday, surged 10 paise to close at 75.63 against the US dollar on Tuesday, fueled by a buoyant higher domestic equity markets and gains in some Asian currencies.
Forex traders said the rupee is trading in a narrow range as positive domestic equities supported the local unit, while sustained foreign fund outflows and concerns over coronavirus outbreak weighed on the local unit.
In Tuesday’s trading, the rupee opened at 75.53, and finally settled at 75.63, registering a rise of 10 paise over its previous close. The intra-day high and low were recorded at 75.50 and a low of 75.72 against the US dollar, respectively.
“Other Asian currencies have also started with gains against the US Dollar this Tuesday morning amid risk appetite returned to the market as many countries planned to ease the restrictions on the lockdown enforced due to the COVID-19 pandemic,” Reliance securities said in a research note.
However, some analysts also suggest that the domestic currency will stay vulnerable if tensions between US and China continue to escalate.
“Tensions have escalated between China and US as latter has accused the former of suppressing information on COVID outbreak, that originated in China and has since spread around the globe. US has threatened to impose higher tariffs to penalize China and even warned of stringent action. As long as this kind of rhetoric continues to dominate the headlines, Asian currencies, along with Chinese Yuan can depreciate against US Dollar. Rupee cannot be immune,” Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities, said in a note.
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