Rupee ends flat at 74.83 per dollar

Indian rupee erased early gains and ended flat at 74.83 per dollar, amid selling seen in the domestic equity market.

It opened 13 paise higher at 74.70 per dollar against Friday's close of 74.83 and traded in the range of 74.67.74.89.

At 14:39 IST, the Sensex was down 103.08 points or 0.27% at 38025.82, and the Nifty was down 37.10 points or 0.33% at 11157.10.

Despite the rupee falling 8 paise, the US$INR pair remained almost flat. We feel 75 would continue to act as hurdle whereas a fall in the Dollar index would push the rupee to move towards 74.5 levels, said ICICIdirect.

The dollar-rupee contract on the NSE was at 74.86 in the last session. The open interest fell 2.1% in the last session, it added.

Oil prices edged down on Monday as rising coronavirus cases and tensions between the United States and China pushed investors toward safe-haven assets.

Gold hit an all-time high on Monday as tit-for-tat consulate closures in China and the United States rattled investors, boosting the allure of safe haven assets, although sentiment was mixed with tech gains supporting some Asian stocks.

“Last week USDINR spot traded in a very tight range of 74.50-75. The pair was unable to fall below 74.50 on likely RBI intervention and caution over US-China trade war. If the trade tiff escalates then fears of US ending the Phase-One deal will arise keeping USDINR afloat. But we don’t expect a sharp rally as traders are focusing on the coronavirus vaccine developments and are pretty convinced over getting additional stimulus packages," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

"In spot 75 is acting as a psychological resistance, a consistent trading above that will lead to a rally towards 75.50. The USD/INR 1-month ATM Volatility has dropped to 5% from 5.67% as on July 14. The fall in ATM Volatility Term structure indicates that the market is not showing signs of stress."

"Also, USDINR PCR (Put/Call ratio) has fallen to 0.87% from 0.91% seen last week. Also, with 5 days left for the expiry, according to the Max Pain theory, the USD/INR July contract will expire in between 75-75.25. Thus, until significant cues, we expect USDINR will continue the sideways move within a broader range of 74.50-75.50. Only either side break will clarity over the trend,” he added.