Rupee drops 3 points to 73.18 against US dollar in first trade

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Investors are cautious and await details of the US stimulus as President-elect Joe Biden takes office.

The rupee opened on a flat note and depreciated 3 points to 73.18 against the US dollar when trade opened on Thursday, following the muted opening of domestic stocks.

In the interbank forex market, the domestic unit opened at 73.18 against the US dollar, posting a decline of 3 paise from its previous close.

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On Wednesday, the rupee stood at 73.15 against the US dollar.

“The flows of REITs to domestic stock markets could elevate sentiment,” Reliance Securities said in a research note and added that “RBI’s presence could cap earnings.”

On the one hand, the dollar index, which measures the strength of the greenback against a basket of six currencies, edged up 0.04 percent to 90.39.

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Traders said investors remain cautious and await details of the US stimulus as President-elect Joe Biden outlines his plans for a massive fiscal stimulus.

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“Right now, feelings of risk are stuck in the race for Covid-19 cases and vaccine rollout. Ultimately the vaccine will win out, but until then the fear of lockdown is overhead. Locally, many IPOs are expected this year, so the overall drop in the USDINR spot will continue, ”said Rahul Gupta, Head of Research – Currencies at Emkay Global Financial Services.

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“Lately the RBI intervention is seen around the 73 area so the USDINR spot will hover in the 72.90-73 area with 73.50 being the immediate resistance. A breakout of 72.90-73 will push prices towards 72.75, ”added Gupta.

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