The Indian Rupee is expected to depreciate on Monday amid firm dollar. Moreover, a surge in crude oil prices will weigh on the domestic currency. Further, market participants will remain cautious ahead of consumer price inflation reading data. “US$INR (March) is expected to move further towards 77.0 for the day,” said ICICI Direct. At the interbank foreign exchange market, the rupee opened weak at 76.34 against the greenback and fell further during the session as investors moved away from riskier assets. After oscillating between a high of 76.27 and a low of 76.72 during the session, the local unit settled at 76.61 against the dollar, down 18 paise from the previous close.
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee fell in Friday’s session and extended its fall of the previous sessions as the dollar gained against its major crosses and following an uptick in global crude oil prices. Dollar hit the highest level in five years following the ongoing tension between Russia and Ukraine. The uncertainty has also kept the rupee weighed down against the US dollar. The dollar has also been supported by expectations that the Federal Reserve will start raising interest rates at this week’s policy meeting, with inflation running hot.”
“Apart from the Fed, the Bank of England will also release its policy statement and another rate hike from the BoE could extend gains for the pound. Investors continue to monitor the situation and talks that could be taking place between Russian and Ukrainian officials and that could be triggering volatility for most of the currencies. 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.”
Tapish Pandey, Research Analyst, SMC Global Securities
“Dollar rupee likely to remain volatile as participants will continue to monitor developments around the Russia-Ukraine war and Covid wave in China, both of which threaten to further disrupt global supply chains. Expected rate hikes from Fed, BoE likely to boot Dollar sentiments for coming sessions. On domestic front, foreign institutional investors (FII) pulled out again Rs 2,263.90 crore from Indian markets while likely to remain cautious for rupee.”
“Dollar rupee has took a breather after making record high near 77.33 future levels, the small price correction in USDINR make trading setup more comfortable for USDINR which was trading at overbought zone earlier. For now USDINR future price likely to face resistance of its all time high level near 77.33. Sustaining above the same may witness sharp rally towards 78 marks while on flip side support is placed around 76.21 followed by 76.00 levels. Considering current trading setup and global sentiments, we are recommend to buy USDINR near month future on dip by keeping stop loss below 76.00 marks and upside potential target will around 77.33 levels.”
Kshitij Purohit, Lead Commodity & Currency at CapitalVia Global Research
“On Friday, the rupee gave up its early gains and fell 18 paise to 76.61 (provisional) against the dollar, owing to dollar demand from oil importers and state-owned power providers. Foreign capital outflows and geopolitical concerns dampened risk appetite, causing investors to flock to safe-haven assets. Dollar demand from oil importers and state-owned power providers halted the rupee’s rise. The local currency was also pushed down by the dollar’s strengthening versus major currencies as a result of improved US economic data.”
“The USDINR pair also surged as a result of a large state-owned bank’s continuous dollar purchases on behalf of a large domestic corporation for offshore outflows. Furthermore, several banks continued to buy dollars on behalf of oil marketers. Investors’ risk appetite remained low around the world as negotiations between Russia’s and Ukraine’s foreign ministers produced no progress.”
INR likely to trade in broad range of 76-77 on spot, over the next 2-3 days: Kotak Securuties
“Oil down 3% in early Asia trading session is likely to have positive rub-off on INR. Oil looks to be down mainly on account of lower demand from China as it declared to lock down Shenzhen. Looks like market kind of front running that more stricter lock down can be announced by China, if number of cases don’t come down, and hence some softness in oil. But at the same time, dollar index continues to slowly inch higher, ahead of FED meeting, keeping in check any sharp pull back in non dollar currencies. Given the way, markets are priced with most of negative news on Russia-Ukraine front and energy prices, it appears that we may see INR trading in broad range of 76-77 on spot, over the next 2-3 days.”
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