Mumbai: Optimism over the development of Covid-19 vaccine along with broad-based growth trends is expected to induce volatility in the rupee's value during the short term.
The US Fed's FOMC minutes, US-China trade talks, and expectations on Q1 GDP rate will be the other key factors steering the rupee.
Last week, the rupee strengthened to Rs 74.85 against a greenback.
"Expect next week range at Rs 74.60 to Rs 75.10 with some appreciation bias," said Sajal Gupta, Head, Forex and Rates, Edelweiss Securities.
"FY21 Q1 GDP numbers are expected to show contraction between 15-20 per cent and any positive surprise could help the market sentiments."
According to Anindya Banerjee, DVP, Currency and Rates, Kotak Securities: "Dollar is going to be range-bound due to lack of triggers."
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"The RBI intervention below Rs 74.80 and exporter selling above Rs 75.30 may keep it between Rs 74.50 and Rs 75.50 per dollar for the medium term."
The Reserve Bank of India is known to enter the markets via intermediaries to either sell or buy US dollars to keep the rupee in a stable orbit.
"This week the movement in USD/INR spot has mainly been dollar driven and the spot traded in a very tight range. Going ahead, insights into how the US economy is recovering from the coronavirus pandemic, optimism over vaccine, along with uncertainty regarding the US-China trade talks will keep playing out on the USD/INR pair," said Rahul Gupta, Head of Research-Currency, Emkay Global Financial Services.
"We expect Rs 74.50 to continue acting as crucial support while Rs 75.20 will act as a strong resistance. Only consistent trading above Rs 75.20 will open the doors for Rs 75.50 zone."
(IANS Report)
