The USDINR pair made a gap down opening at 74.32 levels and traded in the range of 74.24-74.34 with a sideways bias. The pair finally closed the day at 74.29 levels. The rupee rose against the dollar because the US unit weakened after US Fed Chair Powell stated that there is still a long way to go for a recovery in the country's labour market before the Fed begins to withdraw its massive $120-bln stimulus. Back home, equities rose on the back of China's efforts to calm the market's nerves. Reports stated that China's securities regulator had meetings with banks to soothe their concerns on the recent market jitters, which also improved sentiment for riskier assets.
The rupee got an additional boost when foreign banks sold the US unit likely for overseas inflows into Indian companies looking to raise capital through IPO. On an annualized basis, a premium on the one-year, exact-period dollar/rupee contract stood at 4.41%, against 4.42% recorded in the previous day. The 10-year G-Sec benchmark 06.10 GS 2031 closed the day at 6.1975%. The RBI set the reference rate for USDINR at 74.28 levels.
Germany’s jobs market recovery accelerated as businesses rebuilt their workforce to cope with continuously strengthening demand. Unemployment in Europe’s largest economy fell in July, more than economists expected, pushing down the jobless rate to 5.7%. Oil prices rose as crude stockpiles in the US, the world's top oil consumer, fell to their lowest since January 2020, with Brent crude oil prices pushing back past $75 a barrel.
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