Rupee opens 22 paise up at 73.44 against dollar

The rupee on Wednesday opened 22 paise higher at 73.44 against the US dollar, supported by foreign inflows into domestic equities. Besides, positive developments on Covid-19 vaccine front, improved domestic macro-economic data and weakness of the American currency against key rivals also supported the rupee.

“In the recent past, fund inflows by the foreign institutional investors (FIIs) have led to an appreciation in the currency,” said Motilal Oswal Financial Services in a note.

This week, market participants will remain cautious ahead of the RBI policy statement. There are hopes that the central bank could keep rates on hold but governor’s stance on the overall economy is likely to trigger volatility for the dollar.


At the same time, while economic recovery will continue to remain the cornerstone of the central bank’s monetary policy focus for the foreseeable future, high inflation that has hovered at the 6 per cent mark will likely outweigh other concerns in the next policy review.

For today, Motilal Oswal Financial Services expects the USDINR (Spot) to trade lower and quote in the range of 73.40 and 73.80.

Euro rose to the highest level in three months as the dollar was weighed down against its major crosses on expectation of more monetary stimulus from the United States. Today, Powell and Treasury Secretary Steven Mnuchin will testify on the CARES Act, under which Congress made $2 trillion available to the Treasury as coronavirus aid, a large portion of which was aimed to support the FOMC’s lending programs.

This week, a number of economic data are expected to release from the US and a weaker-than-expected economic number could keep the dollar weighed down against its major crosses.