Rupee vs US Dollar: INR opens at a one-month high versus USD

"Post multiple attempts, the rupee yesterday finally broke the barriers to moving swiftly toward 82.68 levels. When Indian markets were off on 15-16th August and USDINR notched towards 83.46 levels in NDF, traders sold USDINR in the NDF market. On 17th August, when USDINR opened lower onshore amid RBI intervention, they might have bought USDINR. Hence, the market had a skewed position of the Sell-side in the NDF and the Buy-side in the onshore which can be termed as arbitrage," said Amit Pabari of CR Forex.

"Yesterday, RBI restricted banks from taking a fresh arbitrage position in NDF, which restricted sellers from selling more in NDF. Hence, they had to square off their onshore buying position by selling USD resulting in a sharp appreciation in the rupee. Secondly, FDI Investments that were lined up backed by fundraising from Adani, Reliance, and other corporates would have started hitting in thereby leading to an acceleration in the move.

All in all, with DXY resisting around 103.50 levels, appreciation in the Chinese Yuan and Japanese Yen, and domestic fundamentals remaining positive, the rupee is likely to have a soft landing towards 82.20-82.00 levels in the near term," Pabari added.