The Indian rupee, the local currency benchmark gained 6 paise to 73.55 per US dollar on Monday's opening session, tracking weak US currency and positive domestic equities.
The domestic unit opened 3 paise lower at 73.64 at the interbank forex market, then gained ground to touch 73.55 against the greenback, rising 6 paise over its previous close.
On Friday, the Indian rupee had staged a smart rebound, buoyed by gains in domestic equities and gained by 28 paise to settle at 73.61 per US dollar on Friday.
Vaqarjaved Khan-Research Analyst, Angel Broking said,"In the week gone by Indian rupee depreciated by 0.06 percent and currently stands at 73.7 against the US dollar. India's Finance ministry is expecting a nominal GDP growth of 19 percent in FY22 against a double digit contraction in FY21. The double digit expansion can be credited to a lower base in FY21.
He added,"On the other hand, US FED vice chairman Richard Clarida noted that the central bank will not be considering raising interest rates from near zero until inflation has hit the 2 percent target. He admitted that it would take several years before the US FED can start raising interest rates as the US economy continues to recover from the Covid-19 induced recession. Unemployment data for the week from US too came in a bit higher against expectations at 870K."
On Rupee's outlook, he added,"With easing monetary policy from US FED here to stay, USDINR (CMP: 73.7) is likely to move lower towards 72.5 in the coming week. (28th Sep-2nd Oct 2020)."
Abhishek Goenka, Founder and CEO, IFA Global said, "The market would look forward to how Biden stands up to Trump. President Trump would want to consolidate his Republican base, touching upon issues which resonate most with them."
Goenka further said that "today (Monday) is the September Currency derivatives expiry. We could see some selling at RBI fix. Month-end exporter selling could limit upside in USD-INR. It is likely to trade 73.50-73.85 range intraday."
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.16 per cent to 94.48. US dollar slipped marginally over political uncertainties as Trump and his Democratic rival Joe Biden begin their first presidential election debate today.
Market participants will watch the testimony on the economic outlook by the Federal Reserve on any indications that the policymakers are considering a potential US coronavirus stimulus.
On the domestic equity market front, the 30-share BSE benchmark Sensex traded 500 points higher at 37,890, while Nifty gained 151 points to trade at 11,201..
Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking said," The dollar is also trading lower on lack of big moves ahead of the U.S. presidential debate on Tuesday and the release of U.S. economic data later in the week. Political uncertainty also pressurize the dollar."
Foreign portfolio investors (FPIs) sold shares worth Rs 2,080.21 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 2,070.63 crore in the Indian equity market on 25 September, provisional data showed.
Brent crude futures, the global oil benchmark, fell 0.72 per cent to USD 41.62 per barrel. Oil price remained within a tight range on Friday. The range has been in play for more than a week now.
Worldwide, there were 333 lakh confirmed cases and 10.02 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 60-lakh mark and the death toll from COVID-19 infections rose to 0.95 lakh.
In upcoming domestic cues, RBI is set to begin its three-day monetary policy meeting on Tuesday. Overseas, US will release its CB consumer confidence data on Tuesday, while Euro will take cues from ECB president's speech on Monday and Wednesday.
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