Rupee faces headwinds
The Indian rupee is facing headwinds as higher yields on US bonds and rising crude oil prices in the global market have firmed up the demand for dollars.
The Indian rupee is facing headwinds as higher yields on US bonds and rising crude oil prices in the global market have firmed up the demand for dollars.
It was a topsy-turvy week that went by. Markets were flat for the first two trading sessions, and then gained, lost and ended the week with gains.
It is not just Western sanctions on Russia that accelerated the trend to circumvent the dollar, but the strength of the currency in the past year has also posed a challenge.
The government has allowed international trade settlements in Indian rupees for export promotion schemes under the foreign trade policy.
Citing the uncertainty in the global macro environment, the Indian rupee is likely to be under pressure, especially if crude prices remain elevated and global growth slows down.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent, up at 92.18.
From a technical perspective, the rupee is holding below its resistance level of Rs 72.50 to a dollar as well as trend resistance.
The value of the country's gold reserves decreased, declining by $580 million to $37.440 billion.
At the interbank forex market, it witnessed an intra-day high of 74.68 during the session and a low of 74.90 against the US dollar.
Forex traders said positive domestic equities, foreign fund inflows and hopes of a COVID-19 vaccine supported the rupee.
