US Dollar

Besides, Reserve Bank's dollar buying spree is expected to support this trend. "Rupee is expected to weaken on the back of a strong US dollar and rising inflation concerns," said Sajal Gupta, Head, Forex and Rates at Edelweiss Securities. "It is expected to trade between 74.05 to 74.60 with an upward bias." Last week, the rupee strengthened to 74.16 per USD due to four bumper IPOs hitting India's stock markets.

Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors said: "Flows from Zomato IPO should start hitting the market as dollar eases after RBI strongly ensured that 74.80 is not breached on the upside. Range for the day 74.30 to 74.70. Exporters to sell near to the higher end of 74.70 while importers to buy near the lower end for near term imports."

The rupee ended at 74.32 per dollar on Wednesday, weakening by 9 paise from its previous close. Rahul Gupta, Head Of Research (Currency), Emkay Global Financial Services, said: "The rupee is on an edge, for which the greater sensitivity probably lies towards stronger US data and a stronger dollar." He noted that that the foreign exchange market is focusing on a "potentially hot" US labour report.

Wednesday's spike was mainly driven by the growing number of vaccinations across the UK and the weakening US dollar against the blanket of currencies, Xinhua news agency reported citing local analysts as saying.