Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
The Indian Rupee depreciated for the first time in 3 sessions against the dollar, tracking the strength of the greenback.
The Rupee ended at 73.91 compared with 73.85 in the previous session.
Meanwhile, near-term forward premiums eased, leading to unwinding of carry positions and also weighed on the domestic unit this Wednesday.
The one-year implied yield was down to 4.93% from 5.31% yesterday, while the one-year forward premium was at 3.67 rupees versus 3.82 rupees at previous close.
Meanwhile, Asian equities and currencies were range bound this Wednesday and had little impact on the markets.
Meanwhile, the benchmark BSE Sensex and the NSE nifty ended with gains this Wednesday regaini ng losses made on Tuesday and capped the depreciation bias of the local unit.
In other news, Reserve Bank of India Governor Shaktikanta Das acknowledged the risks from the current coronavirus wave in the country and announced measures for easy availability of credit for individual and small businesses.
Technically, the USDINR spot pair remained in narrow 20-paisa range this Wednesday. However, briefly it did breach the 74.00 level today, it was unable to sustain above the level. So, 74.00 still remains a pivotal resistance. On the downside it was unable to break 73.70 which remains the support. So, the range between 73.70-74.00 is still intact and either side break will provide us fresh ranges.
The Dollar extended gains this Wednesday afternoon trade amid talks about the possibility of higher U.S. interest rates and safe-haven appeal for the greenback.
Markets could look to cues from the non-manufacturing PMI data and ADP employment change, a precursor to the non-farm payrolls from the U.S. tonight.
Investors focus also is expected to shift to April payrolls data due on Friday for further cues on the health of the U.S. economy.
Technically, the Dollar Index range for today's session is $91.05-$91.50.