Rupee gains 26 paise to close at 82.61 against US dollar; ends 2022 with 11.2 pc fall

Mumbai, Dec 30 (PTI) The rupee spurted by 26 paise to close at 82.61 against the US dollar on the last trading session of 2022 on Friday, as the American currency retreated from its elevated levels and a rising appetite for riskier assets among investors.

The local currency, however, ended the year on a negative note, with a loss of 832 paise or 11.20 per cent, primarily led by a strong dollar against its major crosses overseas.

The greenback climbed in the overseas market as the US Federal Reserve raised rates aggressively following surging inflation.

At the interbank foreign exchange market, the local unit opened at 82.77 and touched an intra-day high of 82.61 and a low of 82.82 against the greenback. It finally settled at 82.61, registering a rise of 26 paise over its previous close of 82.87.

On December 31, 2021, the rupee settled at 74.29 against the US dollar.

According to Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, the rupee appreciated on Friday on softness in US Dollar and risk-on sentiments in global markets.

However, a surge in crude oil prices and sustained selling by foreign investors put downside pressure on the rupee. FIIs have remained in the past 5 consecutive sessions. The US Dollar declined on the rise in risk appetite in global markets.

“We expect the rupee to trade with a slight negative bias on expectations of recovery in the US Dollar and recovery in crude oil prices. Concerns over a surge in COVID-19 cases may also put downside pressure on the rupee,” Choudhary said.

Rupee continued to trade in a narrow range and volatility remained low ahead of new year holidays. On Thursday, the dollar rose in the overnight session even after pending home sales numbers from the US came in lower, Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, said.

Euro and pound both are trading sideways but are facing some exhaustion at higher levels. “We expect the USDINR(Spot) to trade sideways and quote in the range of 82.40 and 83.05,” Somaiya said.

“The last trading day of the year has come to end, and we saw holiday driven volatility drain. The USDINR pair after multiple attempts failed to move above the 83.00 handle, and was broadly consolidating between 82.50 and 83.00,” said Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.

Banerjee further said that in the sessions to come, the way the pair reacts around the 83.00 zone will be crucial to watch. “As of now technically we can expect the 83.00 level to act as a resistance and on the down side we might see 82.50 act as a support,” Banerjee said.

On the domestic equity market front, the 30-share BSE Sensex declined 293.14 points or 0.48 per cent to end at 60,840.74, while the broader NSE Nifty fell 85.70 points or 0.47 per cent to 18,105.30.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.02 per cent to 103.85.

Global oil benchmark Brent crude futures fell 0.53 per cent to USD 83.02 per barrel.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday as they offloaded shares worth Rs 2,950.89 crore, according to exchange data.