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Rupee likely to appreciate amid rising risk appetite in global markets; USDINR pair to trade in this range

The rupee is expected to appreciate amid retreat in dollar and rise in risk appetite in the global markets. However, sharp gains may be prevented on consistent FII outflows and elevated crude oil prices.

rupee vs dollar, dollar to rupee, usdinr
USDINR's future price to consolidate in a broader range of 77.30-77.75 levels with a positive bias

The Indian Rupee is likely to appreciate against the US Dollar on Tuesday amid rise in risk appetite in global markets. However, gains may be capped by persistent FII outflows, elevated crude price. Rupee hit a new all-time low versus the US dollar last week. With the global stock markets extending their string of losses, cryptocurrencies seeing a sharp sell-off and the US dollar moving to a 20-year high, the fall in rupee was not entirely unexpected. The local unit has depreciated by 4.18% since the beginning of the year and closed in the previous trading session at 77.44 against the greenback.

Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services

“Rupee remained under pressure and fell to fresh all-time lows as the broader strength in the dollar continued. Hawkish Fed outlook by the Fed is keeping the dollar supported at lower levels. Market participants remained cautious ahead of the important inflation number that was released this week. On the domestic front, inflation and industrial production number was released. Data showed inflation in India rose to 7.79% as compared to estimates of 7.3%. Food inflation, which is driving the rise in retail inflation, rose by 8.38%, the highest so far in this fiscal. April’s print was higher than 6.95% in the previous month and 4.23% a year ago.”

“Industrial production growth remained subdued at 1.9% in March compared to a year ago. On the other hand, dollar gained strength after inflation in the US came in at 8.3%, higher than the 8.1% estimate but below 8.5% the prior month. Today, from the US, market participants will be keeping an eye on the retail sales and Fed Chairman’s speech to gauge a view for the greenback. We expect USDINR(Spot) to trade sideways with a positive bias and quote in the range of 77.40 and 78.20.”

Rupee likely to appreciate: ICICI Direct

“The rupee is expected to appreciate today amid retreat in dollar and rise in risk appetite in the global markets. However, sharp gains may be prevented on consistent FII outflows and elevated crude oil prices. Additionally, investors fears that due to soaring inflation central banks across globe are dialling back easy money and challenging the already weary economic growth. US$INR (May) is expected to trade in a range of 77.35-77.80.”

Tapish Pandey, Senior Research Analyst, SMC Global Securities

“The Dollar Rupee is likely to trade firm as the 10-year US Treasury note’s yield staying firmly on hopes the Federal Reserve will prudently hike interest rate hikes after downbeat Chinese and New York state data kindled recession fears. On charts, the Dollar-Rupee is trading on a higher top and higher bottom chart pattern, indicating a bullish trend for now. The USDINR, the future price is facing resistance near 77.75-77.77 levels sustained above, which may edge higher towards 78.00 marks, while on the downside, support is located around 77.28-77.30 levels. For now, we are expecting USDINR’s future price to consolidate in a broader range of 77.30-77.75 levels with a positive bias.”

Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities

“A dead flat close from USDINR, at 77.54. Pre RBI fixing, Rupee was strong as flows and possible RBI intervention kept the local currency on bid. However, post fix demand waned and as a Rupee drifted towards unchanged levels. Option sellers continue earn premium as implied volatility has come off in both weekly and month end options. Futures traders are waiting for their turn as they make the best returns when momentum is strong. Global cues were mixed with Euro, GBP and JPY all staying near their day’s lows. Crude oil prices have ticked higher towards $110. Brent has been range bound between 100-120. Bias continues to be slightly upward. Key support level remains around 77 on May futures. Resistance near 77.70 and 78.00 levels.”

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