The Indian rupee (INR) today strengthened to as much as 71.50 against the US dollar (USD), but later pared gains to end marginally higher. Opening at 71.67 a dollar, the rupee traded in a range of 71.50 to 71.73 against the US dollar, as compared to its previous close of 71.72. The rupee settled just 2 paise higher at 71.70, extending gains to the fourth day. Improved global risk sentiment lifted the rupee against the US dollar while domestic stock markets also ended higher. After struggling in early trade, Indian stock market indices Sensex and Nifty managed to end higher today. . Here are 5 things to know about rupee-dollar trade today:
1) Spot USD-INR has support in the range of 71.40 to 70.80 and resistance at 72.40, said HDFC Securities.
2) Forex traders will be looking ahead to ECB's rate decision and US CPI, both due this Thursday, says forex advisory firm IFA Global. US Federal Reserve rate decision is also due next Wednesday.
3) The rupee is down about 2.5% so far this year against the US dollar. So far this month, foreign investors have sold worth $671 million worth of Indian equities (net) while they bought $334 million in debt securities. HDFC Securities expects the rupee to remain volatile in the near term ahead of inflation and industrial production data, due later this week.
4) Global risk sentiment has improved after US and China said they will restart trade talks next month. "Though risks on US-China trade war front, Brexit and Hong Kong protests have eased somewhat, investors would be cautious as we have seen optimism fade away very quickly in recent times," IFA Global said.
5) Global risk sentiment was also supported by comments from Federal Reserve Chair Jerome Powell that the US central bank would continue to act "as appropriate" to sustain the economic expansion. "With markets already having run ahead in terms of easing expectations from Fed, risks are skewed in favor of a scenario in which the Fed were to not sound as dovish," IFA Global added.