Indian rupee fell sharply against the US dollar amid broad strength in US dollar and higher US bond yields. The rupee fell 23 paise to 73.47 against US dollar as compared to previous close of 73.24. The dollar rose today as traders weighed the implications of higher US Treasury yields amid US President-elect Joe Biden’s push for huge fiscal aid to fight the impact of the pandemic.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.37% to 90.43.
Biden has said he will lay out proposals this week for trillions of dollars in fiscal support to fight the economic toll of surging virus cases.
“The Indian rupee is expected to trade within 73.15-73.55 levels as dollar index is extending its rebound in Asian markets on back of sharp gain in longer-term treasuries post weaker job data that increased the prospects of more US stimulus. The President-elect Joe Biden, who takes the control of both houses of Congress, has promised “trillions” in extra pandemic-relief spending,” said Amit Pabari, MD of CR Forex Advisors.
“Indian equities are outperforming other developed markets and emerging markets on back of strong inflows and positive sentiment led by news of rolling out of COVID-19 vaccine in India from Jan 16, 2021. This week, focus will be on India’s CPI and IIP data which are releasing tomorrow, he added.
“Overall, daily chart suggests that 72.90 is likely to remain strong support and 74.00 is likely to remain short term resistance. It is advisable to sell on upticks close to 73.50 levels and if it breaches that then one can look for selling around 73.90-74.00 levels,” he added.
Indian stock market benchmark Sensex was up nearly 350 points, hitting the 49,000 level for the first time.
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