Investors are cautious and await the US stimulus details as President-elect Joe Biden assumes office.
The rupee opened on a flat note and depreciated by 3 paise to 73.18 against the US dollar in opening trade on Thursday tracking the muted opening in domestic equities.
At the interbank forex market, the domestic unit opened at 73.18 against the US dollar, registering a fall of 3 paise over its previous close.
On Wednesday, the rupee had settled at 73.15 against the American currency.
“FPI flows into the domestic equity markets could lift sentiments,” Reliance Securities said in a research note and added that “RBI’s presence could cap gains.”
On the one hand, the dollar index, which measures the greenback’s strength against a basket of six currencies, rose marginally by 0.04 per cent to 90.39.
Traders said investors remained cautious and await the US stimulus details as President-elect Joe Biden will outline his plans for massive fiscal stimulus.
“Right now the risk sentiments are stuck in the race of Covid-19 cases and vaccine rollout. In the end, vaccine will win but until then the fear of lockdown is hanging over the head. Locally, there are a lot of IPOs lined up this year, so overall downside in USDINR spot will retain,” said Rahul Gupta, Head of Research — Currency, Emkay Global Financial Services.
“Lately, RBI intervention is seen around 73 zone, so USDINR spot will hover in 72.90-73 zone, with 73.50 being the immediate resistance. A break of 72.90-73 will push prices towards 72.75,” Mr Gupta added.