IPO related flows can keep the USDINR spot near 73 zone but a break of which can push price towards 72.75, while 73.50 will act as a resistance, says Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services
Indian rupee is trading higher at 72.99 per dollar, amid buying seen in the domestic equity market.
It opened higher at 72.96 per dollar against Wednesday’s close of 73.02.
At 11:14 IST, the Sensex was up 332.73 points or 0.67% at 50,124.85, and the Nifty was up 96.10 points or 0.66% at 14,740.80.
“Rupee traded with strength with risky assets witnessing inflows after a statement from US Janet Yellen about stimulus rolling should be in large sums without thinking about debt right now. This push dollar bit lower towards 90.30 helping rupee scale beyond 73,” said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.
The dollar held losses versus most major peers on Thursday as optimism that a massive U.S. stimulus package under the new Joe Biden administration will bolster growth sapped demand for safe-haven currencies.
According to ICICI direct, the Put base at 73 is likely to act as crucial levels for the currency pair as it has remained an important support in the recent past. A move below these levels might open the gates for sharp appreciation. The dollar-rupee January contract on the NSE was at Rs 73.08 in the last session. The open interest increased by 0.7% in the current series.
Oil prices fell on Thursday after data showed U.S. crude stocks unexpectedly rose last week, reigniting worries about pandemic restrictions cutting into fuel demand.
“The USDINR bulls have taken a breather after Yellen’s remarks on pushing for a fiscal stimulus package which is eventually going to increase inflation. The focus of the market is on Biden’s inauguration for clues about his agenda in the first 100 days and whether he announces countrywide lockdown or continues Trump’s stance against China as he takeovers,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
“IPO related flows can keep the USDINR spot near 73 zone but a break of which can push price towards 72.75, while 73.50 will act as a resistance,” he added.