The rupee strengthened sharply against the US dollar on Monday as India’s back-to-back strong economic data continued to fuel investors.India reported that it’s merchandise trade deficit decreased against an expectation of increase.
The domestic unit ended 20 paise higher at 86.80 against the greenback, the highest close since Feb. 24. Intraday, the rupee rose 24 paise to 86.76, according to Bloomberg data.
India reported a $14.05 billion merchandise trade deficit against expectation of $21.35 billion in February. The deficit was at $19.51 billion a year ago, Informist reported.
These data came right after softer inflation print for February and upbeat industrial production, which reinforced confidence in India’s economy.
The domestic unit opened nine paise stronger at 86.91 against the dollar as India’s foreign exchange reserves rose $15.27 billion to $653.97 billion in the week ended on March 7, marking the biggest increase since Aug. 27, 2022.
A sustained dip in the US dollar index also provided comfort to the Indian unit. The DXY was trading 0.12% down at 103.59 as of 3:28 p.m.
“Given the current sentiment, the USDINR pair is expected to trade within the 86.80–87.40 range in the near to medium term,” Amit Pabari, managing director of CR Forex Advisors, said. “A breakout beyond this band could trigger an additional move of 30–50 paise in the same direction, keeping market participants on high alert for potential volatility.”
. Read more on Markets by NDTV Profit.A sustained dip in the US dollar index also provided comfort to the Indian unit. Read MoreMarkets, Economy & Finance, Notifications
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