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Below is quote on Evening Currency Update 28 January 2022 by Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives, Kotak Securities

It was a cocktail of positive factors in play for USDINR this week. Spot closed nearly 1% higher at 75.04. On one hand, it was the US central bank striking a very hawkish tone and on the other, it was Brent crude oil prices trading near $90 a barrel, which caused a short-covering rally in USDINR. FPIs have been on a sell mode over the past two weeks, selling nearly $3 billion. However, the pace of appreciation is still muted thanks to hopes of policy changes in the Budget next week. Next week, the Union Budget will be the most important event to watch. There are three areas where the focus will be. First, it will be, the fiscal math: revenue projections and fiscal deficit, second it will be around the amendment of tax laws to allow GOIsecs to be included in global bond indices and finally, it is the expectation of amendment to FEMA laws to allow FDI in LIC, ahead of its IPO. With the global market environment as challenging as it can get, post-budget volatility can increase. If there is any disappointment in the Union Budget, then USDINR can rise quite sharply, possibly towards 76.30/50 levels on Feb futures. Important support remains at 74.80 levels.

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