Indian rupee, the local currency appreciated 14 paise to 73.25 against the US currency on Monday's opening deals, tracking weak US dollar and sustained foreign fund inflows into the domestic equity market. Heavy buying in domestic equities, and strong Asian currencies also aided the positive trend in the local unit.
The domestic unit opened at 73.26 per US dollar at the interbank forex market, then gained further ground and touched 73.25 against the greenback, registering a rise of 14 paise over its previous close. The rupee had surged 43 paise to close at 73.39 to the US dollar on Friday, its best closing level in nearly six months.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.09 per cent to 92.29. The dollar index fell to a two-year low against the basket of Asian currencies as the US Federal Reserve's new policy framework suggested that interest rates would remain low for some time.
"The US dollar continues to get pummeled. The comments by US Fed chair Jerome Powell in Jackson Hole about Fed adopting average inflation targeting implies inflation expectations can rise without overnight rates rising. This has resulted in the US yield curve steepening. US real rates are lower and that is weighing on the US dollar," said Abhishek Goenka, Founder and CEO, IFA Global.
On the domestic equity market front, Sensex and Nifty erased from early gains and fell to bearish territory on Monday, amid rising cases of coronavirus and bleak economic data that kept gains checked in global equities. Erasing gains after six consecutive gains, Sensex traded 140 points lower at 39,326 and Nifty was falling 74 points to 11,573.
Foreign portfolio investors (FPIs) bought shares worth Rs 1,004.11 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 543.56 crore in the Indian equity market on Friday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.61 per cent to USD 46.09 per barrel.
Worldwide, there were 253 lakh confirmed cases and 8.50 lakh deaths from COVID-19 outbreak. Meanwhile, India reported 78,512 new COVID-19 infections, taking the death toll to 64,617 and total coronavirus cases to 36.21 lakh as of Monday.
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