We expect USDINR pair to retrace towards 73 levels, says ICICI Direct.
Indian rupee ended higher by 15 paise at 72.43 per dollar, amid buying saw in the domestic equity market with Nifty hitting fresh record high.
It opened 10 paise higher at 72.48 per dollar against previous close of 72.58 and traded in the range of 72.32-72.49.
At close, the Sensex was up 307.66 points or 0.60% at 51422.88, and the Nifty was up 97.80 points or 0.64% at 15435.70.
“Yesterday expectation was that due to month end closing in futures there could be some buying but flows are so huge that all buying is being absorbed and USDINR is just not able to move higher. Today also is month end for OTC and the opening seems to be below 72.50 as the market gets sold off,” said Anil Kumar Bhansali, Head of Treasury – Finrex Treasury Advisors.
“Equities higher and other currencies generally consolidating while EM currencies all gaining against the dollar will keep dollar rupee in a range of 72.20 to 73.00. Exporters to sell the uptics while importers to buy the near term on all dips,” he added.
Gold prices were flat on Friday, as an uptick in the dollar and US Treasury yields pressured bullion, while investors awaited crucial US inflation data later in the day.
Oil prices pushed higher on Friday, supported by firm U.S. economic data and expectations of a strong rebound in global fuel demand in the third quarter, while concerns eased about the impact of any return of Iranian supplies.
The positive sentiment in the domestic currency is influenced by a rally in domestic markets. However, the Dollar index is hovering near support of 89-90 levels. We expect USDINR pair to retrace towards 73 levels, said ICICI Direct.
The dollar-rupee June contract on the NSE was at Rs 72.89 in the last session. The open interest rose almost 7% for the June series, it added.