The Indian rupee is expected to appreciate on Wednesday due to a softer dollar. Moreover, expectations of RBI intervention in forex markets may continue to support the local unit. However, higher FII funds outflows from domestic markets may weigh on the rupee. US$INR (March) is expected to move towards 76.75, according to ICICI Direct. The Indian rupee appreciated 0.07% to 76.91 against the US dollar at close on Tuesday. The domestic currency had gained as much as 0.33% during the day, but ended flat. This was the best closing since 25 February as the currency has depreciated every day since.

Heena Naik- Research Analyst – Currency, Angel One Ltd

In today’s session, the Indian rupee is expected to continue with its weak trend owing to the ongoing geopolitical risk in Ukraine. Markets will be looking out for fresh cues in the upcoming US president speech targeting Russia. It was reported that the European Union shall cut its dependency on Russian gas by 80% this year. This along with higher crude prices is likely to play with the Indian equities and the local unit.

Tapish Pandey, Research Analyst, SMC Global Securities

“Dollar-Rupee likely to trade firm as oil prices climbed yet further, driven by the U.S. President Joe Biden announced a U.S. ban on Russian oil and other energy imports, ramping up a pressure campaign on Moscow in retaliation for the invasion of Ukraine. Overall trend of USDINR remains bullish with immediate support is placed near 76.73 followed by major support near 76.45 levels while on higher side resistance is seen near 77.32-77.33 sustain above which may edge higher towards 78 marks. Taking into consideration strong dollar, pricey crude oil and continued FII outflows we are expecting USDINR to trade in a range of 76.50-77.50 with positive bias hence we recommend to buy on any dips by keeping stop loss below 76.50 levels (all near month’s future levels).”

Kshitij Purohit, Lead Commodity & Currency at CapitalVia Global Research

“The rupee rose 3 paise against the US dollar on Tuesday, closing at 76.90 (provisional) on the back of higher domestic equities and a weaker dollar. Technically, a daily close below the prior resistance line from April 2021, now at 76.95 at press time, might push USD/INR values towards the year 2021 peak of 76.59. Meanwhile, a break over the recent high of 77.14 on the upside might extend the rally beyond the 80.00 level. It’s worth noting that the recent decline appears to have been prompted by an overbought RSI and a shift in market mood, and the same is likely to continue if the quote falls below 76.95.”

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

“Rupee traded in a narrow range after remaining under pressure in the past few sessions. Uncertainty continues to keep market participants on the edge but on the domestic front higher global crude oil price is disturbing the overall market sentiment. This week, focus will be on the ECB policy statement and expectation is that the ECB will wait until the last months of this year for its first interest rate rise in over a decade. In the next couple of sessions we expect the USDINR (Spot) to trade sideways with a positive bias and quote in the range of 76.40 and 77.20.”