Mumbai: The uncertainty around the US elections threw the currency markets in a tizzy. On Tuesday, the Rupee slipped to 74.8825 and in the trading session on Wednesday it quoted levels of 74.88 before recovering to 74.43 levels.
At 3.15 p.m., the rupee traded at 74.80 to a greenback.
That the Rupee inched closer to levels of 75 may help India's Forex balance and Technology companies, but around a festive season, a dearer dollar has an impact of daily life - smartphones turn expensive so does the price of Gold. Although Gold trades inversely proportional to the value of the Dollar, a weaker Rupee results in costlier Gold.
Rahul Gupta, Head of Research, Currency, at Emkay Global Financial Services in a note explained that the USD-INR spot trade could move as much as 74 - 75.50. He said: "The USDINR spot is respecting the immediate resistance of 75, but the caution and volatility will keep the appreciation intact."
While the markets are anxious about who wins the US Presidential elections there is also consensus that a fiscal stimulus is likely given whoever wins the Presidential elections. "No matter who wins. Stimulus shall be coming. So expect US dollar to weaken in two weeks time after a clear win.," said ajal Gupta, Head, Forex and Rates, Edelweiss Securities in a note.
"Markets would not like a delayed result, which can lead to prevalence of more risk-off sentiment," added Gupta.
At the end of the day's trade, the rupee stood at 74.7462 from its previous close of 74.4063 to a greenback.
"A lack of clarity on the outcome of the US Presidential Election has created a lot of uncertainties," said Nish Bhatt, Founder and CEO, Millwood Kane International.
"Global equity and currency market have reacted according to it. With the US Dollar gaining strength, the Indian rupee saw a decline, as it slipped towards the crucial 75 per US dollar mark."