The dollar index – which measures the greenback against six currencies – fell as much as 0.21 per cent on Tuesday. At the interbank forex market, the rupee opened at 74.79 per dollar and later gained further ground to touch 74.73 per dollar amid positive global equities, up 18 paise over its previous close of 74.91 on Monday.
The rupee rose by 18 paise – 0.24 per cent – to 74.73 against the US dollar on Tuesday. It traded in a range of nine paise between 74.73 and 74.82 against the greenback, having started the day stronger at 74.79 compared to its previous close of 74.91.
Analysts report that gains in domestic equity markets extending a rally to the fifth trading session in a row and weakness in the American currency overseas supported the rupee. Further, the Rupee is expected to star near 74 in the near term.
Over 1% rise was observed in domestic stock markets Sensex and Nifty, led by automaker and energy stocks, as hopes for a COVID-19 vaccine and strong earnings momentum minimized fears over surging domestic cases. The Sensex jumped as much as 504.39 points to 37,923.38 and the Nifty benchmark climbed to as high as 11,164.45 – both their strongest intraday levels recorded since March 5.
Though rupee witnessed gain, other Asian currencies were mixed. Japanese yen traded 0.08 per cent lower against US dollar, but Singaporean dollar and Chinese yuan were down 0.10 per cent each, and Thai baht, South Korean won and Taiwanese dollar were up 0.35 per cent, 0.46 per cent and 0.19 per cent respectively.
In recent days, the bias for the rupee has directed towards appreciation as the (USD-INR) pair remains well supported by persistent inflows and sentiments turning positive amid vaccine hopes. CR Forex Advisors Amit Pabari said that 74.50 levels sound likely in the next few sessions indicating trend change. But if the Reserve Bank Of India intervenes as last time, the pair is likely to bounce back to 75.00 territories. If the range is broken, more benefits could be seen.
At Monday’s close, the rupee has recovered 2.46 per cent from a record low of 76.91 logged in April but is still down 5.13 per cent against the US currency so far in 2020.

Read EquityPandit’s Nifty Outlook for the Week