Rupee Overview

The rupee closed at 76.1900, stronger than its opening on Friday against the dollar today as concern over a resurgence in COVID-19 cases in the US, China and Germany, following easing of containment curbs, offset any hope of a quick economic recovery globally. Earlier this week, six states in the US reported record high number of new COVID-19 cases. While more than 150 new cases were reported in Beijing since last week, China has reportedly brought the recent outbreak under control. This stoked concern over a second wave of job losses as businesses are already hit by the lockdowns imposed earlier. Further, US President Donald Trump on Thursday once again threatened to cut ties with Beijing after a high-level face-to-face diplomatic talks with China, which happened for the first time in months. In response to US Trade Representative Robert Lighthizer's statement to the US House of Representatives Committee on Wednesday that he doesn't think it was possible to break ties with China, Trump tweeted that the US "certainly does maintain a policy option, under various conditions, of a complete decoupling from China". Meanwhile, weaker-than-expected US jobs data may also weigh on investors' sentiment. Geopolitical tensions in Asia--between India and China as well as between North and South Korea--will also be a point of concern for investors.However, market players expect the Reserve Bank of India to intervene in the currency futures or the spot market to limit any sharp depreciation in the rupee. Sales of the greenback by exporters at lucrative dollar/rupee levels may also support the rupee.