We expect the rupee to trade in a broad range of 73 to 74.20 levels for the rest of this month, says Sugandha Sachdeva, VP-Metals, Energy & Currency Research, Religare Broking.
Indian rupee recovered from the lows and ended at day’s high at 73.25 per dollar, amid buying saw in the domestic equity market.
It opened marginally lower at 73.42 per dollar against previous close of 73.38 and remained in the range of 73.24-73.47.
At close, the Sensex was up 247.79 points or 0.50% at 49,517.11, and the Nifty was up 78.70 points or 0.54% at 14,563.50.
“We are witnessing a reversal in the dollar index, while political stability in the US and the probability of a further fiscal stimulus package has pushed the long-term US yields higher. Moreover, there is a possibility that the Fed may reduce its bond buying plan towards the end of this year, which could further push US yields higher and consequently hurt the rupee. Back home, with RBI mopping up dollar inflows, the local currency can test 73.80 to 74 levels in the coming sessions,” said Sugandha Sachdeva, VP-Metals, Energy & Currency Research, Religare Broking.
“We expect the rupee to trade in a broad range of 73 to 74.20 levels for the rest of this month,” she added.
Oil prices slipped on Tuesday as investors remained concerned about climbing coronavirus cases globally, though an anticipated drawdown in crude oil inventory in the United States for a fifth straight week stemmed losses.
The dollar held four days of gains against major peers on Tuesday as the prospect of massive fiscal stimulus pushed U.S. yields higher.
“Volatility remained high in the USDINR pair last week as the dollar index rebounded above 90 levels. Further upsides towards major Call base of 74 can be expected in the pair,” said ICICIdirect.
“The dollar-rupee January contract on the NSE was at | 73.54 in the last session. The open interest fell 1.5% of the January series contracts,” it added.
Gold ticked higher on Tuesday as Asian stocks slipped on political ferment in Washington and a global surge in coronavirus cases, although a firmer dollar and higher U.S. Treasury yields limited gains.