The Indian rupee closed stronger against the U.S. dollar on Monday amid an easing dollar index.
The local currency appreciated 3 paise to close at Rs 82.89 against the greenback on Monday after opening at Rs 82.86. It closed at Rs 82.92 on Friday, according to Bloomberg data.
"Bets for a Fed cut in March have gathered some steam after data showed U.S. producer prices unexpectedly fell in December, sending U.S. Treasury yields sliding in response. ECB officials emphasised the need to wait for more data before making decisions on rate normalisation," said Kunal Sodhani, vice president of Shinhan Bank.
"For the dollar/rupee, Rs 82.75 will act as a support and Rs 83.10 as a resistance," he said.
"As the RBI bought dollars intermittently and oil (importers) on the sidelines, having bought decent amounts of dollars in December, the previous month's rupee was allowed to gain up to Rs 82.85 on Friday, and today's opening will be around Rs 82.88. The CPI data for India came better than expected at 5.69%, while IIP growth fell to 2.4%," said Anil Kumar Bhansali, head of Treasury and executive director at Finrex Treasury Advisors LLP.
"The in-flows are expected to continue and will keep the pair of dollar/rupee on the downside as a major support at Rs 82.80 comes up. Keep a close watch on what RBI does during the day," Bhansali said.
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