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Rupee Ends Stronger At 75.34 Vs Dollar Tracking Asian Currencies

Rupee Ends Stronger At 75.34 Vs Dollar Tracking Asian Currencies

The rupee is down 5.59% against the US dollar so far this year

Rupee Vs Dollar Today: The rupee ended a volatile session on Tuesday stronger at 75.34 against the US dollar on Tuesday, tracking gains Asian currencies, a day after Moody's lowered India's credit rating to a notch above junk. The currency moved within a range of 75.35-75.61 during the four-hour session, having started the day nearly unchanged at 75.56 compared to its previous close. While strength in the dollar overseas kept pressure on the rupee, extended gains in the domestic equity markets amid foreign inflows provided some support to the currency, say analysts.

Domestic stock markets continued their rally for the fifth consecutive session, propelled by gains in banking and financial services stocks. The NSE Nifty 50 index ended up 1.56 per cent at 9,979.10, while the leaner S&P BSE Sensex benchmark climbed 1.57 per cent to 33,825. 

Crude oil prices rose on Tuesday, with traders waiting to see whether major producers agree to extend their huge output cuts to shore up prices at a virtual meeting expected later this week. Brent crude futures - the global benchmark for crude oil - rose 0.91 per cent to $38.67 per barrel.

On Monday, Moody's Investors Service downgraded the country's credit rating to "Baa3" from "Baa2" citing a prolonged period of slow growth in Asia's third largest economy, rising debt and persistent stress in parts of its financial system.

The cut is not driven directly by the impact of the coronavirus but that the pandemic had amplified vulnerabilities in the country's credit profile that were present and building prior to the shock, Moody's said.

The agency maintained a negative outlook for the new sovereign rating, citing worsening government finances as the coronavirus continues to hurt the economy.

"The downgrade was mostly priced in and therefore the currency and equity markets may not react that negatively given that the global risk sentiment is still holding up," said Abhishek Goenka, founder and CEO of forex advisory firm IFA Global.

Foreign institutional investors net purchased Indian equities worth Rs 1,575.46 crore on Monday, provisional data showed.

Currency markets currently operate within reduced trading hours due to the coronavirus-induced lockdown. The temporary timings are from 10 am to 2 pm, instead of the normal timings of 9 am to 5 pm.

At the current level, the rupee is down 5.59 per cent against the greenback so far this year.