Indian rupee settles higher against dollar

Erasing previous session losses, Indian rupee ended higher against dollar on Monday, on persistent selling of the American currency by exporters. Sentiments were upbeat as India's manufacturing sector activities witnessed the strongest rate of growth in three months in July amid improved demand conditions and easing of some local COVID-19 restrictions. The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) rose from 48.1 in June to 55.3 in July, pointing to the strongest rate of growth in three months. Adding more positivity, government data showed that the output of eight core sectors grew 8.9 per cent in June, mainly due to a low base effect and uptick in production of natural gas, steel, coal and electricity. On the global front, dollar lurched lower on Monday, back towards the one-month lows hit last week when it became clear the Fed was in no hurry to tighten policy, and policymakers broadly shared Chairman Jerome Powell's view that rate rises were ‘a ways away’.

Finally, the rupee ended 74.34, stronger by 8 paise from its previous close of 74.42 on Friday. The currency touched a high and low of 74.43 and 74.30 respectively.