We expect rupee to trade in the 74 to 75.60 band in the near-term, says Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.
Indian rupee erased early gains and trading flat at 74.62 per dollar, amid buying seen in the domestic equity market.
It opened higher by 14 paise at 74.50 per dollar against previous close of 74.64.
At 11:11 IST, the Sensex was up 409.91 points or 1.14% at 36431.33, and the Nifty was up 139.60 points or 1.32% at 10747.
“Last week there has been a shift in USDINR spot trading range to 74.50-75.50. The spot was holding the psychological support of 75, however, it broke mainly due to the dollar inflows likely on account of Reliance Jio, and hopes of a V-shape recovery in the global growth. All this while, RBI was intervening and sucking out all the dollar inflows, and it may continue doing so," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
"The year long US-China trade war is reigniting and will put some pressure over the safe-haven demand for dollar in Asian trade. We expect the 74.50 to act as a strong support, consistent trading above 75 may push prices towards 75.50," he added.
Oil prices offered up a mixed market snapshot on Monday, with Brent crude edging higher, supported by tighter supplies, while U.S. benchmark WTI futures dropped on concern that a spike in coronavirus cases could curb oil demand in the United States.
“The bias for the rupee has shifted towards appreciation, given the risk-on environment and significant flows in the market, and as strong data sets from the US have weighed on the dollar. That should lead to the rupee testing levels of 74.30 and 74 eventually, having said that, we believe the RBI will step in at regular intervals, and will not be comfortable to see the rupee appreciate beyond the 73.90 to 74.00 band. We expect rupee to trade in the 74 to 75.60 band in the near-term,” said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.