The Indian rupee opened stronger against the US dollar on Tuesday tracking the softening of the dollar index.
The local currency appreciated two paise against the greenback to open at Rs 83.47. It closed at Rs 83.49 on Monday, according to Bloomberg data.
India’s enduringly strong economic fundamentals, coupled with its substantial foreign exchange reserves acting as a safety net, equip the RBI to effectively mitigate any downward pressure on the rupee, said Amit Pabari, managing director at CR Forex.
The downside of the rupee is capped at Rs 83.60. While it is expected to appreciate to around Rs 83.00-83.20 in the near term, with medium-term appreciation ranging between Rs 82.80 and Rs 82.50, Pabari said.
“Market interpretation of (US Fed chairperson) Powell’s words indicates caution due to unpredictability of inflation trajectory. Mixed comments from Federal Reserve speakers keep investors confused. Dollar index finds immediate support at 104.75,” said Kunal Sodhani, vice president of Shinhan Bank. “For USDINR, Rs 83.38 will act as a support and Rs 83.56 as a resistance.”
