Rupee Registers Strongest Single-Day Recovery In 7 Weeks

INR Vs USD: The rupee crashed to a historic low of 70.40 against the US dollar in the wake of Turkey's currency crisis last week.

The rupee on Monday gained 33 paise from its life-time closing low of 79.15 to close at 69.82 against the US dollar. The rupee traded in the range of 69.86-69.60 against the greenback, before finishing the session 33 paise higher. The gains for the rupee came amid easing trade tensions between the US and China boosting most Asian currencies. At 33 paise, Monday's gain marked the biggest one-day jump registered by the rupee against the American currency in seven weeks. The rupee had, on June 29, gained by 32 paise to settle at 68.47 against the US dollar.

Here are five things to know about the movement of the rupee against the US dollar today:

1. The strong recovery for the rupee came on the back of heavy dollar unwinding and a robust rally in domestic equities, news agency Press Trust of India reported. The dollar index, which tracks the greenback against a basket of currencies, fell 0.01 per cent.
   "The rupee has appreciated today as the US dollar index has witnessed profit booking," Anand Rathi Shares and Stock Brokers' Research Analyst Rushabh Maru told news agency Indo-Asian News Service (IANS).
2. "There is an optimism in the market that US and China would find a solution for ongoing trade conflict. So that has also supported the rupee," he said. Market sentiment globally showed signs of improvement against the backdrop of the upcoming visit of Chinese delegates to the US in order to re-engage in trade talks.
3. The recovery in the rupee against the greenback came after easing of inflation and widening of trade deficit. Trade deficit widened to a more than five-year high of $18.02 billion in July, driven largely by a surge in oil imports, data from the trade ministry showed last week. On the same day, separate data from the ministry showed that wholesale inflation came in at 5.09 per cent in July, easing from an over four-year high of 5.77 per cent logged in the previous month.
4. The rupee had crashed to a historic low of 70.40 before closing at a life-time low of 70.15 against the dollar in the wake of Turkey's currency crisis last week. On Monday, Turkey's lira fell 3.16 per cent to a session low of 6.2 against the dollar.
5. The stock markets scaled fresh record closing highs, with the BSE Sensex gaining 330 points to close at 38,278, and the NSE Nifty settling 81 points higher at 11,551. Advances in metal, infrastructure and auto stocks pushed the markets higher amid gains in other Asian peers.

-GoITWay