The Indian rupee opened stronger against the U.S. dollar on Wednesday as the fall in the dollar index more than offset the impact of the rise in crude prices.
The local currency appreciated two paise to open at Rs 83.04 against the U.S. dollar. It closed at Rs 83.06 on Tuesday, according to Bloomberg data.
Reliance Securities expects the rupee to trade between Rs 82.95 and Rs 83.15 on Wednesday.
“The rupee was moving in small ranges in the last two days and is expected to remain in the range as RBI is expected to absorb all inflows, keeping the rupee in a small range,” said Anil Kumar Bhansali, head of Treasury and Executive Director at Finrex Treasury Advisors.
“The Federal Reserve’s hawkish hold, justified by a robust jobs report and continuous strong growth in Q1, waned expectations of a Fed rate cut. This has favored the yields and dollar index in the last few sessions. Several other Fed officials will be on the wires during the week, and they may dictate the pace of the USD as markets await fresh economic reports,” Kunal Sodhani, vice president of Shinhan Bank said.
“For dollar/rupee, Rs 82.90 will act as a support and Rs 83.20 as a resistance,” he said.