A move above 74.10 may trigger a further pullback in the currency pair, says ICICI Direct.
Indian rupee has erased some of the early losses but still trading lower by 11 paise at 73.49 per dollar, amid selling seen in the domestic equity market.
It opened 21 paise lower at 73.59 per dollar versus Tuesday’s close of 73.38
At 11:11 IST, the Sensex was down 475.87 points or 0.95% at 49,660.71, and the Nifty was down 112.60 points or 0.76% at 14,732.50.
Financial year closing has triggered significant buying in the USDINR pair as it moved to the highest levels in almost a month. A move above 74.10 may trigger a further pullback in the currency pair, said ICICI Direct.
The dollar-rupee April contract on the NSE was at Rs 73.83 in the last session, gaining more than 1%. The open interest increased by almost 12% for the April series, it added.
The dollar rose to a fresh one-year high versus the yen and traded near multi-month peaks with other rivals on Wednesday as investors bet that massive fiscal stimulus and aggressive vaccinations will help the U.S. lead a global pandemic recovery.
Oil prices rose on Wednesday, paring overnight losses a day ahead of a meeting of OPEC and its allies, with investors betting the producers will largely agree to extend their supply curbs into May.