The Indian Rupee is likely to appreciate amid weakness in US dollar, softening of crude oil prices and rise in risk appetite in the global markets. Today, the focus will be on the FOMC minutes. It may show consensus on the need to slow hikes but division on the end-point and whether to prioritise inflation or economic growth. In the previous session, rupee appreciated against the US dollar as the American currency retreated from its elevated levels. Recovery in domestic equities and stronger Asian currencies also supported the rupee. At the interbank foreign exchange market, the local unit opened at 81.72 and finally settled at 81.67, registering a rise of 12 paise over its previous close.
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Raj Deepak Singh, Analyst – Currency, F&O, and Commodities, ICICIdirect
“Rupee is expected to trade with a positive bias on weakness in dollar, softening of crude oil prices and rise in risk appetite in the global markets. Meanwhile, sharp gains may be prevented as investors remained focused on the path of US Federal Reserve interest rate increases. Additionally, manufacturing and services PMI data from major countries across the globe are showing activity in both sectors slowed down. US$INR (November) is expected to trade in a range of 81.45-82.00.”
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee continues to trade in a range and volatility remains low on back of lack of cues on the domestic and global front. In the last hour of the session yesterday rupee gained as the dollar weakened against its major crosses. But losses could be curbed ahead of the Fed policy meeting that is scheduled in December. The Fed in its upcoming meeting could look to raise rates further and maintain hawkish stance.”
“On the other hand, euro gained marginally on expectation that the European Central Bank will press on with policy tightening, adding 50 bps to its deposit rate next month as it worries rapid price growth is becoming entrenched, despite the bloc almost certainly entering recession. Today, focus will be on the preliminary manufacturing and services PMI number to gauge a view for the major crosses. Also from the US, FOMC meeting minutes will be released and that could keep the volatility in dollar elevated. We expect the USDINR (Spot) to trade sideways and quote in the range of 81.20 and 81.80.” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities
USDINR spot closed 17 paise lower at 81.67, on the back of FPI flows and some corporate inflows. Over the past two trading sessions we believe exporter selling interest has been noticed closer to 81.90 levels on spot. Therefore, over this week, we could see a range of 81.30 and 81.95 may unfold in spot.
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Amit Pabari, MD, CR Forex Advisors
“USDINR is oscillating between a narrow range of 81.50-81.90 levels for the past couple of sessions. Certain key indicators suggest that post the release of domestic inflation figures, RBI may go for another 35 bps hike in the Dec meeting before taking a pause. Well, already squeezed differentials would be compressed more with Fed’s nearly 1% more hike on the cards, thereby keeping the pair supported around 80.50 levels in the near term. The overall risk-on mood amongst the Asian peers today would cap any rise in the pair past 82.00 levels. Until the pair remains below 82.20 mark, selling on the rise is suggested for the near term.”
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