Rupee advances to 1-mth high of 74.29 against US dollar

 The Indian rupee strengthened by another 9 paise to end at one-month high of 74.29 against the US dollar on Thursday, tracking gains in Asian peers after dovish US Federal Reserve's comments.

At the interbank forex market, the local unit opened at 74.32 against the greenback and witnessed an intra-day high of 74.22 and a low of 74.34.

It finally ended at 74.29 against the American currency, registering a rise of 9 paise over its previous close -- its best closing level since June 29.

"Indian rupee appreciated as global risk sentiments rebounded, while safe haven dollar declined reacting to the dovish Federal Open Market Committee (FOMC)," Dilip Parmar, Research Analyst, HDFC Securities said, adding that FOMC outcomes favoured the risk sentiments as they are not in rush to scale back asset purchases at-least for next two meetings.

"Spot USDINR is expected to trade with negative bias following weaker dollar index, risk sentiment and strong dollar inflows from initial public offering. The pair is expected to hold support at 74.15 and get resisted around 74.60," he noted.

According to Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services, the rupee consolidated in a narrow range but traded with a positive bias against the US dollar after the Fed held a dovish stance and mentioned that the US economic recovery is still on track despite a rise in coronavirus infections.

"Today, focus will be on the advance GDP number that will be released from the US. Expectation is that the number could beat estimates and that could support the dollar at lower levels. We expect the USDINR (Spot) to trade sideways with a negative bias and quote in the range of 74.05 and 74.55," Somaiyaa said.

Meanwhile, other Asian currencies also ended with gains this Thursday and aided sentiments.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, dipped 0.30 per cent to 92.04.

On the domestic equity market front, the BSE Sensex ended 209.36 points or 0.40 per cent higher at 52,653.07, while the broader NSE Nifty advanced 69.05 points or 0.44 per cent to 15,778.45.

Brent crude futures, the global oil benchmark, rose 0.39 per cent to USD 75.03 per barrel.

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