We feel the overall setup for the rupee remains positive and USDINR future is likely to move towards 73 levels, says ICICI Direct.
Indian rupee is trading higher at 72.96 per dollar, amid volatile trade seen in the domestic equity market.
It opened flat at 73.02 per dollar against previous close of 73.04.
The Sensex was down 19.50 points or 0.04% at 50173.83, and the Nifty was down 5.20 points or 0.03% at 15102.90.
Call writers continued to dominate due to which the rupee managed to move towards 73 levels. We feel the overall setup for the rupee remains positive and USDINR future is likely to move towards 73 levels, said ICICI Direct.
The dollar-rupee May contract on the NSE was at Rs 73.18 in the last session. The open interest rose almost 2.2% for the May series, it added.
Oil prices fell for a second day on Wednesday on the potential of Iranian supply returning and as investors sold on speculation that inflation fears might lead the U.S. Federal Reserve to raise interest rates, which could limit economic growth
“A relentless rally in the domestic equities, strong portfolio inflows and a weak dollar index are steering the Indian rupee on a higher trajectory. The accelerated vaccination drives in the US and the UK are leading to optimism with regards to robust global economic growth and have boosted ‘risk-on’ sentiments in the markets,” said Sugandha Sachdeva, VP- Commodity & Currency Research, Religare Broking.
“Even as inflation worries persist, the recent statements from the US Fed officials have eased concerns with regards to a sooner than expected rate hike by the US Fed. That’s suppressing the greenback and favoring an appreciation bias for the domestic currency in the near-term.”
“Markets will now look forward to minutes of the Fed’s April meeting for further cues about the central bank’s monetary policy stance. As of now, we expect the rupee to post further gains towards 72.70 mark, from where we may see it reversing course,” Sachdeva added.
The US dollar teetered near a six-year low against its Canadian counterpart and nursed losses against European currencies as expectations that US interest rates will remain low undermined the greenback.
Gold prices inched up on Wednesday, hovering near a four-month high on a weaker dollar, while investors awaited minutes from the US Federal Reserve’s last policy meeting as inflation worries persist.
