Rupee rises 4 paise to 73.27 per US dollar amid weak equities

The currency benchmark Indian rupee opened on a flat note and inched 4 paise higher to 73.27 per US dollar on Thursday's early trade, amid weak opening in domestic equities and rising dollar.

The rupee was trading in a narrow range at the interbank forex market. It opened at 73.32 against the US currency, gained 4 paise to touch 73.27, from its previous close.

On Wednesday, the Indian rupee settled at 73.31 against the greenback, rising 4 paise per US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength rose 0.03 per cent to 93.40. The dollar index was up against its rivals, on the back of renewed questions over a COVID-19 vaccine.

On the domestic equity market front, market indices Sensex and Nifty traded lower on Thursday, after 10 days of straight gains amid weakness in global markets. Sensex traded 150 points lower at 40,644 and Nifty fell by 35 points to 11,935.

Foreign portfolio investors (FPIs) bought shares worth Rs 821.86 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 1,276.14 crore in the Indian equity market on 14 October, provisional data showed.

Brent crude futures, the global oil benchmark, rose 0.16 per cent to USD 43.39 per barrel.

Worldwide, there were 387 lakh confirmed cases and 10.96 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 71-lakh mark and the death toll from COVID-19 infections rose to 10.9 lakh, as of today.

On Rupee's outlook, Anuj Gupta - DVP- Commodities and Currencies Research, Angel Broking said," Yesterday, Indian Rupee appreciated by 0.22 percent while the Dollar Index decreased by 0.15 percent. India's CPI inflation for September came in at 7.34 percent remaining well above RBIs tolerance band for sixth consecutive month. August retail inflation was 6.69 percent. U.S. economic data since May has been surprisingly strong, though it will still take perhaps another year for output to claw back to its pre-pandemic peak, according to Federal Reserve Vice Chair Richard Clarida. President Trump's proposal for an extra stimulus package to support the economy fell significantly short of expectations. Despite this news, House Speaker Pelosi showed confidence that a deal will be reached eventually. CPI data from US came in line with market expectations at 0.2 percent for Sep'20. Positive data and positive comments from IMF may support the currency."

For today's technical outlook, he added," As of today traders can go for sell in USDINR at 73.50, with the stop loss of 73.70 and for the target of 72.90. We are expecting appreciation in USDINR in short term and it may test 72.50 levels soon."

"Rising number of COVID-19 cases is prompting worries about a new wave of lockdowns in Europe and hopes from US stimulus spending are fading. This could limit appreciation bias for the domestic unit," Reliance Securities said in a research note.

It further added that "RBI mopping up flows by purchasing dollars in anticipation of fund and portfolio flows could also keep the appreciation bias limited for the domestic unit".

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