For the week, we expect the spot to trade within 72.50-73.50 with a sideways bias, says Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services.
Indian rupee erased early losses and trading flat 73.04, amid buying seen in the domestic equity market.
It opened 16 paise lower at 73.18 per dollar against Friday’s close of 73.02.
At 12:23 IST, the Sensex was up 240.37 points or 0.48% at 50645.69, and the Nifty was up 81.70 points or 0.55% at 15019.80.
The rupee remained above 73 levels as the Dollar index moved towards 92 levels. We expect further upsides to be seen in the USDINR pair. It is likely to move towards 73.80 levels in coming days, said ICICI Direct.
The dollar-rupee March contract on the NSE was at Rs 73.31 in the last session. The open interest increased marginally by 3.7% for the March series, the firm added.
The dollar fell against the currencies of major commodity exporters on Monday as investors increased bets on countries that will benefit from rising prices for oil, metals, and other goods.
Brent crude futures jumped above $ 70 a barrel on Monday for the first time since the COVID-19 pandemic began, while U.S. crude touched its highest in more than two years, following reports of attacks on Saudi Arabian oil facilities.
“The forex market is very volatile, and the short-term trading range has shifted to 72.50-73.50. The speculation that reopening of economies, along with additional fiscal stimulus will increase inflation and the Fed will have to begin tapering at earliest is activating the dollar bulls,” said Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services.
“In our view, traders are prematurely betting for Fed rate hike and an actual discussion will begin in the late 2021. But until then, the global cautious tone will limit the fall in spot on account of slew of IPOs lined up in coming months. For the week, we expect the spot to trade within 72.50-73.50 with a sideways bias,” he added.
