Indian rupee pared initial gains and settled 2 paise down at 74.68 against the US dollar on Monday even as the domestic equity market traded in the positive territory.
Forex traders said positive equities, foreign fund inflows and weak US currency supported the local unit, however rising COVID-19 cases weighed on investor sentiment.
In a highly volatile session, the rupee which opened at 74.53 against the US dollar, touched an intra-day high of 74.52 against US dollar, and a low of 74.82.
The domestic unit finally closed at 74.68 against the US dollar, down 2 paise over its previous close of 74.66 on Friday.
“Despite lower safe-haven currencies, the rupee was unable to add gains today amid higher crude oil prices and bargain buying of dollars by the importers. The Indian rupee gained 1.32 per cent or one rupee a dollar in the previous week,” Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities said.
Vakil further said that the trend for the Indian rupee remains on bullish side following weaker dollar index and foreign fund inflows.
“Spot USDINR is having support at 74.30 and resistance at 75 for next couple of days,” he said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.24 per cent to 96.94.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 525.69 points higher at 36,547.11 and broader NSE Nifty rose 173.50 points to 10,780.85.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 857.29 crore on Friday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 1.66 per cent to USD 43.51 per barrel.
Meanwhile, the number of cases around the world linked to COVID-19 has crossed 1.14 crore and the death toll has topped 5.34 lakh.
In India, the death toll due to the disease rose to 19,693 and the number of infections spiked to 6,97,413, according to the health ministry.