The Indian rupee closed stronger on Wednesday after the US Dollar Index fell. The local currency strengthened by 2 paise to close at Rs 83.32 against the US dollar. It closed at Rs 83.34 per dollar on Tuesday, according to Bloomberg data.
"The US Dollar retreats further on the back of US PMI's falling in contraction. Surprisingly, upbeat PMI data from France, Germany and the Eurozone trigger substantial strength in the Euro," Kunal Sodhani, vice president of Shinhan Bank, said.
"DXY cools off with support at 105.20 and resistance at 106.40. For USDINR, 83.1 acts as a support, while 83.40 a resistance," Sodhani said.
Despite the stability of the DXY near 106, rupee movement remained limited within a narrow range, holding around the 83.50 levels in recent days, according to Jateen Trivedi, research analyst at LKP Securities.
The Lok Sabha election is expected to keep the rupee volatile within a range of 83.15–83.65, Trivedi said. "Market participants will closely monitor the PCE Price Index data in the US on Friday for further insights into the currency's direction."
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