Rupee likely to open flat against US greenback, USDINR pair to quote sideways in this range

The Indian Rupee could open flat to marginal positive against the greenback on Friday tracking a holiday in the major countries.

Dollar rupee
The Indian Rupee appreciated against the U.S. Dollar on Thursday.

Indian Rupee on Thursday (30 December) rose 29 paise to settle at over one-month high of 74.42 against the US dollar, following year-end dollar selling by banks and exporters. At the interbank foreign exchange market, the domestic unit opened at 74.56 against the US dollar and registered an intra-day high of 74.38 and intraday low of 74.65. In an early trade session, Rupee rose 15 paise to 74.56 against the US greenback to finally settle at 74.42, a level not seen since November 24. Meanwhile, the dollar index, which measures the strength of the US dollar against the basket of six currencies, rose 0.26 per cent to 96.18.

Rupee likely to open flat to marginal positive

The Indian Rupee appreciated against the U.S. Dollar on Thursday tracking increased confidence in most Asian peers and on reducing worries even though Omicron is spreading quickly. The Rupee ended at 74.37 against the dollar as compared with 74.73 close in the previous session. For the monthly January 2022 USDINR options, the most active Put strikes are 73.00, 74.00, 74.50, 75.00, 75.25, 75.50 and 76.00 and the most active Call strikes are 73.00, 75.00, 76.00 and 76.50. FPI are net sellers on the day of monthly expiry in the equity market. For the month of December, FPI were net sellers of around $3000 million, said Kshitij Purohit, Lead Commodity & Currency at CapitalVia Global Research.

The Indian Rupee could open flat to marginal positive against the greenback on Friday tracking a holiday in the major countries. Meanwhile, EM’s are trading flat today morning. Technically, if the USDINR Spot trading near crucial support levels, the support levels for USDINR is 74.30 -74.25 levels. However, a trade below 74.20 could drag down the pair towards 74.05 -73.90 levels. Current resistance is 74.55 and above 74.55 pair may push towards 74.70 – 74.80, Purohit added.

Outlook for USDINR bearish

Rupee, after Wednesday’s pause, started heading north to a monthly high on expectation of better inflows going ahead and dollar selling from exporters on year end. Central bank’s remain aside from intervening and technical selling has been seen accelerated in USDINR on breaking of support 74.50. Outlook for USDINR has turned bearish and we could see a level of 74.15, the 200 days simple moving average and breaking of the same could open further downside towards 73.70. On the higher side, 74.70 becomes the resistance, said Dilip Parmar- Research Analyst, HDFC Securities.

USDINR (Spot) to quote sideways

Rupee continued to strengthen against the dollar, despite the rising cases of coronavirus on the domestic front; flows from corporate treasuries, volatility in domestic equities and RBI led interventions supported the upmove in the currency. The dollar index witnessed a fall in yesterday’s session thereby supporting the rupee. On the data front, new claims for U.S. unemployment benefits fell in the week leading up to Christmas and benefits rolls slid to their lowest level of the pandemic era the previous week. We expect the USDINR(Spot) to quote sideways and quote in the range of 74.40 and 74.80, said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

The US dollar advanced 0.05% yesterday amid upbeat economic data from the US. US unemployment claims data showed number of people filing for jobless claims fell for week ending December 25. Further, strong data helped ease fears that resurgence of Covid-19 cases would curb economic recovery. Rupee future maturing on January 27 appreciated by 0.44% as concerns over severity of Omicron variant eased. However, firm dollar and muted domestic markets prevented further gains, said ICICI direct in its Currency Outlook report.

The rupee is expected to depreciate on a strong dollar and risk aversion in domestic markets. Further, the rupee may slip on persistent FII outflows, surge in crude oil prices and month end dollar demand from importers. Additionally, investors will remain vigilant ahead of economic data from country, it said.

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