ICICIdirect feels that rupee is likely to move towards 73 levels due to weakness in the dollar.
Indian rupee erased early gains and ended lower at 73.46 per dollar, amid buying seen in the domestic equity market.
It opened 13 paise higher at 73.16 per dollar against previous close of 73.29 and traded in the range of 73.14-73.51.
At 14:04 IST, the Sensex was up 383.05 points or 0.98% at 39,356.75, and the Nifty was up 102.80 points or 0.89% at 11,606.20.
"With second stimulus package unlikely to pass, USDINR (CMP: 73.13) is likely to move in range from 72.5 mark at the lower end of the spectrum and 74 mark at the higher end. (5th Oct – 9th Oct 2020),” said Vaqarjaved Khan - Research Analyst, Angel Broking.
The dollar was softer against riskier currencies on Tuesday on rising optimism that U.S. lawmakers could agree on new stimulus to blunt the economic impact of the coronavirus.
Oil prices edged higher in early trade on Tuesday after U.S. President Donald Trump returned to the White House from hospital after being admitted for treatment for COVID-19 last Friday, while another storm brewed in the U.S. Gulf of Mexico.
The Dollar index remained muted on the back of hopes of more stimulus. The rupee started the week by depreciating marginally. However, we feel it is likely to move towards 73 levels due to weakness in the dollar, said ICICIdirect.
The dollar-rupee October contract on the NSE was at 73.41 in the last session. The open interest rose 3.7% in the last session, it added.