If rupee starts trading above 72.90 an important mark going ahead, we can witness further weakness in USDINR towards 72.70, says Jateen Trivedi, Senior Research Analyst at LKP Securities.
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Indian rupee opened flat at 72.87 per dollar on Wednesday against Tuesday’s close of 72.88, amid volatile trade seen in the domestic equity market.
On February 8, domestic unit ended higher by 8 paise at 72.88 per dollar against Monday’s close of 72.96.
At 10:04 IST, the Sensex was down 85.34 points or 0.17% at 51,243.74, and the Nifty was down 17.80 points or 0.12% at 15,091.50.
The USDINR continued to trade near 73 levels along with rise in crude oil prices. However, a sustainable bounce is not expected due to a sharp fall in the dollar index, which will keep the USDINR pair move in check, said ICICIdirect.
The dollar-rupee February contract on the NSE was at Rs 73.04 in the last session. The open interest increased almost 3% for February series, it added.
The dollar traded near two-week lows as demand for safer assets ebbed on Wednesday, with traders looking ahead to an expected recovery from the COVID-19 pandemic this year, driven by massive fiscal and monetary stimulus.
Oil prices rose again on Wednesday, extending their more than week-long rally after industry data showing a fall in U.S. crude oil stocks added to optimism about an expected rise in global fuel demand.
“Rupee traded strong near 72.90 as dollar index witnesses weakness. The fund inflow from USA keeps dollar prices at check from rising, which helps rupee appreciation, along with no weakness in capital markets,” said Jateen Trivedi, Senior Research Analyst at LKP Securities.
“If rupee starts trading above 72.90 an important mark going ahead, we can witness further weakness in USDINR towards 72.70,” he added.
