Rupee likely to appreciate on weak dollar, decline in crude prices; USDINR pair to trade in this range | The Financial Express

Rupee likely to appreciate on weak dollar, decline in crude prices; USDINR pair to trade in this range

Rupee is is expected to appreciate further amid weakness in US dollar and sharp decline in crude oil prices. Sharp appreciation may be prevented on risk aversion in global markets and FII outflows.

Rupee likely to appreciate on weak dollar, decline in crude prices; USDINR pair to trade in this range
USDINR spot price is expected to trade in a range of Rs 81.80 to Rs 83.30

The Indian rupee is likely to appreciate further on Thursday amid weakness in dollar and sharp decline in crude oil prices. “Meanwhile, sharp appreciation in the local unit may be prevented on risk aversion in global markets and FII outflows. US$INR (December) may trade in a range of 82.10-82.55,” said ICICIDirect. In the previous session, rupee closed slightly higher against the US dollar, snapping a three-day losing streak, as the Reserve Bank of India raised interest rates and took a hawkish stance in its fight against inflation. RBI raised its benchmark interest rates for a fifth consecutive time and said GDP growth in India remains resilient while inflation is expected to moderate but the battle against inflation is not over. Rupee ended at 82.47 per dollar, up marginally from its previous close. The currency had lost 1.7% in the past three sessions.

Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas

“We expect Rupee to trade with a negative bias on expectations that US Dollar may strengthen further on hawkish Federal Reserve and risk aversion in global markets. Reports of outflows due to MSCI rebalancing may also weigh on Rupee. However, declining crude oil prices may prevent sharp downside in Rupee. USDINR spot price is expected to trade in a range of Rs 81.80 to Rs 83.30.”

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

“Rupee traded in a narrow range ahead of the RBI policy statement that was released yesterday. In line with expectation, the central bank raised rates by 35bps to 6.25% and voted to remain focused on withdrawal of accommodation. The RBI lowered the growth forecast for the current year to 6.8% from 7% earlier and retained inflation projections at 6.7%. It, however, has made mild upward revisions to the inflation forecasts for the current quarter and the next quarter.”

“The market expected that the governor would signal about the rate hike cycle coming to an end, but this policy shows no signs of it. However, reaction of the policy on the currency and money market was muted. The focus will now be on the FOMC policy statement that is scheduled next week and hawkish comments is likely to extend gains for the dollar. Today, volatility could remain low as no major economic data is expected to be released from the US. We expect the USDINR(Spot) to trade sideways and quote in the range of 82.20  and 82.80.”

Amit Pabari, MD, CR Forex Advisors

“Today, the Rupee is expected to open higher on the back of improved risk sentiment. Falling Crude oil prices, appreciating move in Yaun (lower PboC’s CNY fixing), and recovery in emerging market currencies to support the Rupee gain. Traders will be closely watching the Gujarat election results today; if any surprise comes then that could increase the volatility, although the chances of unexpected outcomes are lesser. Overall, the RBI is expected to intervene in the spot market to curb a one-sided directional depreciating move. Any uptick towards 82.50 should be sold, it seems the market has made a short-term top and can retrace back to 81.00-80.50 levels in the near term.”

(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 08-12-2022 at 09:00 IST