MUMBAI, April 25 (Reuters) – The Indian rupee will be looking to build on the previous session’s momentum on Tuesday in wake of the dollar’s decline and fall in U.S. yields.
Non-deliverable forwards indicate the rupee will open at around 81.88-81.90 to the U.S. dollar compared with 81.9050 on Monday. Dollar offers by foreign banks, likely related to their custodial clients, helped the rupee once again move past the 82 level.
Momentum was “definitely in favour” of the rupee, but USD/INR is near levels where it has been well supported in recent days, a spot trader said.
Whether the 81.75-81.80 support on USD/INR is taken out will be up to the Reserve Bank of India and on prevalence of more dollar inflows, he said.
The rupee at open will be helped by the overnight slide on the dollar. The dollar index dropped to lowest in more than a week, impacted by the fall in U.S. yields and the rally on the euro.