As the Dollar index is sustaining near 91 levels, we feel weakness could continue and the USDINR may head towards 74 levels, said ICICIdirect.
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Indian rupee opened 20 paise higher at 73.35 per dollar on Tuesday against Monday’s close of 73.55, amid buying seen in the domestic equity market.
On March 1, Indian rupee ended marginally lower at 73.55 per dollar against Friday’s close of 73.46.
At 10:02 IST, the Sensex was up 519.57 points or 1.04% at 50,369.41, and the Nifty was up 152.60 points or 1.03% at 14,914.10.
The USDINR March futures fell marginally on the back of profit booking as OI fell 10% along with the price. However, as the Dollar index is sustaining near 91 levels, we feel weakness could continue and the pair may head towards 74 levels, said ICICIdirect.
The dollar-rupee March contract on the NSE was at Rs 73.78 in the last session. The open interest fell almost 10.1% in the March series, it added.
Oil prices fell more than 1% on Tuesday, extending losses that began last week, as investors unwound long positions on concern that OPEC may agree to increase global supply in a meeting this week and Chinese demand may be slipping.
The dollar stood firm against its low-yielding peers on Tuesday on bets of a faster economic recovery and greater tolerance of higher U.S. bond yields, while the Australian dollar looked to guidance from the country’s central bank.
“There was some recovery in INR yesterday after the bad spike on Friday when it ended at 73.92 in futures. It is still a buy on dip market unless 72.80 breaks. So importers may hedge around 73.10-20 levels which exporters between 73.45 to 73.60. Equities are doing well so there can be a sell off in the pair which should get supported at 73.10-15,” said Anil Kumar Bhansali, Head- Treasury, Finrex Treasury Advisors.
