By Rohit Vaid

New Delhi, Jul 31 (IANS): Expected status-quo in monetary policy as well as robust equity markets are expected to strengthen the rupee during the upcoming week.

Last week, the Indian rupee declined marginally after three consecutive weekly gains following risk-off sentiments and fund outflows.

It closed the week at 74.42 before touching 74.22 and 74.75 during this period.

"Rupee managed a strong show despite continuous FPI outflows from Indian markets but was supported by IPO flows. Expect it to trade in range of 74.20 to 74.70 with a bias towards rupee strength," said Sajal Gupta, Head, Forex and Rates at Edelweiss Securities.

"US Fed commentary had been dovish and risk supportive this would help aid risk sentiment across asset classes."

According to Devarsh Vakil, Deputy Head of Retail Research at HDFC Securities: "Fiscal deficit and eight core-infra number and next week's RBI policy meet are two key events to watch out for next week."

"Spot USDINR is in small congestion zone with down side support around 74 and resistance at 74.90."

The monetary policy review is slated for August 4-6.

Accordingly, market observers, expect a status-quo on key lending rates.

"Expectation is that the RBI could continue to hold its dovish stance and at the same time what their outlook is on inflation and growth will be keenly eyed by investors," said Gaurang Somaiya , Forex & Bullion Analyst, Motilal Oswal Financial Services.

"From the US, manufacturing PMI and non-farm payrolls numbers are scheduled and with the Fed raising concern over the recovery of the jobs market; any disappointment is likely to further weigh on the dollar."

In addition, he said that for the week ahead, the USDINR(Spot) is expected to trade with a negative bias and quote in the range of 73.80 and 74.80.