Indian rupee, the domestic currency benchmark, edged 4 paise higher at 72.93 per US dollar on Monday's opening trade, tracking positive opening in the domestic equities and weak American currency. The local unit was trading in a narrow range, ahead of the US Federal Reserve meeting, scheduled later this week.
The domestic unit opened at 72.95 per dollar at the interbank forex market, and inched 4 paise higher to 72.93 over its previous close of 72.97 per American currency.
Abhishek Goenka, Founder and CEO, IFA Global said, "We are likely to see some positioning adjustments across domestic equities, bonds and Rupee in the holiday shortened week, leading up to the budget on 1st February. The economic survey would be tabled a day prior. On the global front, the focus this week will be on the US Federal Reserve monetary policy due late Wednesday evening."
Meanwhile, the dollar index, fell 0.13 per cent to 90.12 against a basket of six currencies.
Reliance Securities said in a research note," Asian currencies were mixed against the greenback ahead of the Fed meeting this week. The euro and the sterling have started marginally weaker against the US Dollar this Monday morning in Asian trade. The Japanese yen was marginally weak against the US Dollar in morning trade."
On the domestic equity market front, equity benchmark indices reversed trend and rose marginally higher on Monday, amid mixed global equities. Sensex was trading 50 points higher at 48,960 and Nifty was up by 15 points to 14,385.
Foreign portfolio investors (FPIs) sold shares worth Rs 635.69 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 1,290.35 crore in the Indian equity market on 22 January, provisional data showed.
Brent crude futures, the global oil benchmark, fell 0.07 per cent to USD 55.37 per barrel. Oil prices continued to ease as US crude inventories showed buildup and new covid-19 restrictions in China and in other major countries.
Kshitij Purohit, Product Manager, Currency & Commodities at CapitalVia Global Research said,"The rupee opened on flat at 72.962 against the US dollar in opening trade on morning tracking queues from Asian equity market amid rising fear of increased case. On Friday it was closed flat at 72.953 against greenback, the rupee down 0.01% last week. The U.S. Dollar Index is closed in green above phycological support of $90 amid near restriction in European country and week data from china. All major currency like Singapore dollar, Japanese Yen, Australian dollar are traded flat against the US dollar this morning in Asian trade as rises in Covid-19 Cases, Hongkong market trading positive 400 points in the morning trade.
He further added,"Technically, USDINR pair closed firm against the US Dollar taking ques from strong economic data and weakness in dollar index. USDINR spot is trading below phycological level of 73.00 preceding 21-day SMA is currently around 73.195, which challenges any recovery moves and below this it may continue in the falling trend pattern wherein support of the pair is at 72.60 levels USDINR option data suggesting market will keep trade in narrow range. Once Pair breaks the support then it may come down towards 72.20 levels."