Going ahead USD/INR spot may trade above the support of 74.50 towards 75.50/76, says Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
Indian rupee has finished lower by 61 paise at 75.71 per dollar, amid heavy selling seen in the domestic equity market.
It opened 63 paise lower at 75.73 per dollar against Thursday's close of 75.10.
The currency market was shut on Friday, May 1 on account of Maharashtra Day.
At 14:11 IST, the Sensex was down 1,895.09 points or 5.62% at 31822.53, and the Nifty was down 540.55 points or 5.48% at 9319.35.
"Last month the movement in rupee was news driven. Rupee depreciated sharply breaching fresh record low (76.90) almost every week, as forex market faced economic uncertainties due to the rising number of cases of coronavirus pandemic across the world. However, the fears surrounding the virus faded with the drug coming. Also, several countries are easing lockdown restrictions which means the economies will start to get back on track,"said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
"However, there is still risk of a second wave of infection and India’s macros are not attractive enough to bring in heavy dollar inflows. Thus, going ahead USD/INR spot may trade above the support of 74.50 towards 75.50/76," he added.
The dollar rose, oil fell and stock markets were poised to slip on Monday as rising US -China tensions over the coronavirus - and growing unease at the gulf between asset prices and grim economic reality - turned investors cautious.
Weakness in the Dollar Index and positive domestic markets helped the rupee to recover sharply. However, the USD-INR pair has moved near its sizeable Put base of 75 and is likely to move towards 76-76.5 in coming days, said ICICIdirect.First Anniversary Offer: Subscribe to Moneycontrol PRO’s annual plan for ₹1/- per day for the first year and claim exclusive benefits worth ₹20,000. Coupon code: PRO365
