Rupee is likely to find strong cushion at 76.60 mark, while it would be difficult for the domestic currency to nudge past the level of 74.80, says Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.
Indian rupee erased some of early losses but trading marginally lower at 75.76 per dollar, amid buying witnessing in the domestic equity market.
It opened 18 paise lower at 75.90 per dollar against Wednesday's close of 75.72.
At 11:02 IST, the Sensex was up 455.01 points or 1.44% at 32060.23, and the Nifty was up 133.80 points or 1.44% at 9448.75.
"Rupee is trading in a very tight range, and not breaking the psychological level of 76. There is some optimism in the forex market over coronavirus vaccine and foreign inflows pertaining to Bharti Airtel Telecom stake sale, KMB QIP or Reliance Jio but it its getting offset by the escalating US-China trade tensions. Trump has already said that he is preparing against China over his efforts to impose national security on Hong Kong," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
"The global growth is already in doldrums due to COVID-19, worsening relations between these two nations will further hobble growth. Once the hurdle around 76 is taken out expect a rally in USD/INR spot towards 76.40/76.55. Any meaningful downside in spot will be seen only once support around 75.20 is broken," he added.
Oil prices fell in early trade on Thursday after U.S. crude, gasoline and heating oil inventories all rose more than expected, dousing hopes of a smooth recovery in demand from coronavirus lockdowns.
"A shift in sentiments is quite visible in the markets which is likely to bode well for the Indian rupee in near term. Risk appetite has returned to the markets and there is lot of optimism as businesses reopen across major economies. As global as well as domestic equities forge ahead, rupee is likely to stay well bid," said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.
"Nevertheless, keeping gains in check are the brewing tensions between the US and China, rise in oil prices and the greenback. Going ahead, rupee is likely to find strong cushion at 76.60 mark, while it would be difficult for the domestic currency to nudge past the level of 74.80," she added.
