Indian rupee open 9 paise up at 86.8525 against the US dollar

The local currency opened at 86.8525 against the US dollar, as compared to 86.9487 at previous close against the greenback.

The Indian rupee opened 9 paise up on February 20 against the US dollar on easing the dollar index.

The local currency opened at 86.8525 against the US dollar, as compared to 86.9487 at the previous close against the greenback.

The dollar index, which tracks American currency's value against six major currencies rose to 107.050 in early trade, as against 107.173 in the previous trading session.

MUFG Global Market Research report said that the US dollar (DXY) has found near-term support following President Donald Trump’s latest threat to impose 25% tariffs on autos, pharmaceuticals, and semiconductors. This could be implemented as early as 2 April, after an ongoing US review of its trade relations with trading partners, which is set to conclude on 1 April.

DXY rose 0.1% to the 107.20 level in Wednesday’s session, extending gains for a second day. Meanwhile, US Treasury bond yields have not moved much, with the US 10-year yield still staying elevated at above 4.50%, the report added.

Amit Pabari, managing director at CR Forex Advisors said the USD/INR pair is expected to trade within a range of 86.60–87.20. The 87.20 level is emerging as a strong resistance, while 86.50 is acting as a critical support zone, A breach below 86.50 could open up path for 85.80-86.00 levels.

On February 19, the RBI Bulletin showed that the central bank sold $15.15 billion in the spot foreign exchange market in December.

The central bank in the Bulletin said that it purchased $53.89 billion and sold $69.05 billion during the period. In November, the central bank had sold a net of $20.23 billion in the spot market.