Indian Rupee, the currency benchmark, slipped 9 paise to 73.55 per dollar in the Indian commodity market on Wednesday amid muted opening in domestic equities and strong US currency.
The domestic unit opened at 73.53, then lost ground to touch 73.55 against the US dollar, falling 9 paise over its previous close of 73.46 on Tuesday.
Asian currencies are trading weak against USD. The rupee is likely to trade in an intra-day range of 73.35-73.65, said Abhishek Goenka, Founder and CEO, IFA Global.
"Considering the fact that foreign direct investment (FDI) related inflows are lined up and the reaction function of nationalised banks, we expect the rupee to continue trading in the 72.90-73.90 range," he said.
The rupee continues to follow a trading pattern wherein nationalised banks aggressively buy the dips to 73.10-73.15 and buy all the way up to 73.45-73.50, Goenka said.
"The overall risk sentiment was holding up until Trump said he was holding back the talks on fiscal stimulus until after the election. The yield on the US 10-year bond touched the highest level since June this year but retreated post president Trump's comment," Goenka added.
The Reserve Bank of India's Monetary Policy Committee (MPC) meet is scheduled during 7 to 9 October 2020. RBI is expected to keep key interest rates unchanged to maintain low inflation amid the pandemic induced recession. Investors will also be keenly awaiting the central bank's guidance on how the economy is performing amid the coronavirus pandemic.
"The RBI has announced the new dates for the MPC meet and the outcome will be out on October 9. We thus expect the rate-sensitive pack to remain volatile in the near future," said Ajit Mishra, VP - Research, Religare Broking.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.15 per cent to 93.82, after President Trump instructed officials to stop stimulus negotiation till elections are over.
US President Donald Trump halted negotiations with the US Congress on a large coronavirus stimulus bill. This comes at a time when top U.S. and European central bankers on Tuesday have called for renewed government spending, to recover major economies from the coronavirus pandemic indices recession.
On the domestic equity market front, Sensex and Nifty opened flat with positive bias on Wednesday, although turned bullish by the first hour of session, amid positive global equities. Sensex was rising 220 points higher at 39,806 and Nifty was trading 45 points up at 11,700. Global equities steadied after recent advnces and fell slightly as oil price fell after the news that Trump called off stimulus negotiation till after US November elections.
Brent crude futures, the global oil benchmark, fell 1.48 per cent to USD 42.02 per barrel. Oil price continued to gain backed by supply disruptions caused by an approaching hurricane in the Gulf of Mexico and the ongoing workers strike in Norway.
Foreign portfolio investors (FPIs) bought shares worth Rs 1,101.76 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 934.84 crore in the Indian equity market on 6 October, provisional data showed.
Worldwide, there were 360 lakh confirmed cases and 10.54 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 67-lakh mark and the death toll from COVID-19 infections rose to 10.4 lakh, as of today.