The rupee (INR) continued its upward march in the first week of 2018, hitting a fresh two-year high of 63.37 against the US dollar (USD) today. The rupee traded in a range of 63.60 to 63.37 against the US dollar today. At 2:36 pm, the rupee traded at 63.42 against the US dollar. The rupee’s gain today comes despite the dollar rising against other currencies. The US dollar index today recovered from three-month lows in the wake of upbeat US data. A higher domestic equity market also helped to lift the rupee. The rupee had closed 63.53 per dollar yesterday.
5 Things To Know About Rupee’s Movement Against US Dollar Today:
1) Traders attributed the rise of rupee today to good bouts of dollar selling from banks and exporters. The Sensex was up around 125 points in recent trade, lifted by gains in metal and healthcare stocks.
2) The rupee also got a lift this week from recent economic data. India’s factory activity expanded at the fastest pace in five years in December, a private sector survey showed on Tuesday, buoyed by a rise in output and new orders, which allowed firms to raise prices. Activity in India’s services industry bounced back to modest growth in December after contracting in the previous month, a private survey showed today.Read more ↓
3) The US dollar posted its biggest annual drop in 2017 since 2003. For the whole of 2017, the US dollar index slid more than 9.8 per cent. This is the greenback’s worst annual performance since 2003. The dollar (USD) retreated in 2017, partly because economic growth picked up outside the United States, with other countries’ central banks moving towards tighter monetary policy, lessening the perceived divergence between the Federal Reserve and others.
4) The rupee had risen almost 6 per cent against the US dollar in 2017, buoyed by strong inflows into Indian capital markets. Besides, the dollar had also wilted against other global currencies.
5) Some analysts expect the rupee to strengthen further from here. In first quarter of 2018, the rupee could be mildly positive against US dollar and may rise up to 63.00 levels, according to forex advisory firm IFA Global. “But on back of global growth and stronger data, US Fed along with other central banks could move towards rate hike and balance sheet trimming. This can be seen capping the rupee’s gains above 62.50 levels in remaining quarters or till end of 2018,” the forex advisory firm adds.