Rupee may appreciate on soft dollar, rising risk tolerance in equity markets; USDINR to trade in this range | The Financial Express

Rupee may appreciate on soft dollar, rising risk tolerance in equity markets; USDINR to trade in this range

Rupee likely to appreciate on Tuesday amid softness in dollar index, rise in risk tolerance in equity markets, FII inflows. USDINR spot price likely to trade in a range of Rs 79 to Rs 80.30 in next couple of sessions.

Rupee may appreciate on soft dollar, rising risk tolerance in equity markets; USDINR to trade in this range
Rupee has shown more resilience than most of the other currencies in recent years and the compounded average growth rate of depreciation is lower as compared to pre-2014.

The Indian Rupee is likely to appreciate on Tuesday amid softness in dollar index, rise in risk tolerance in equity markets, sustained FII inflows. USDINR spot price likely to trade in a range of Rs 79 to Rs 80.30 in next couple of sessions. In the previous session, rupee pared its initial losses to settle higher against the US dollar, tracking positive domestic equities and foreign fund inflows. At the interbank forex market, the local unit opened at 79.66 against the greenback, and ended at 79.55, up 2 paise from its previous close. Rupee has shown more resilience than most of the other currencies in recent years and the compounded average growth rate of depreciation is lower as compared to pre-2014, said commerce and industry minister Piyush Goyal on Monday.

Also Read: Share Market LIVE: Nifty, Sensex likely to open higher, hints SGX Nifty; CPI inflation spikes to 7% in Aug

Raj Deepak Singh, Analyst – Currency, ICICIdirect

Rupee to trade with a positive bias and touch 79.20 levels this week. Moreover, weakness in US dollar index and sharp drop in crude oil prices will support rupee to appreciate further. Investors will keep an eye on major economic data from the US like CPI, PPI, initial jobless claims and retail sales data next week. The Producers Price Index (PPI) MoM is expected to drop from 1.1% to 0.1%. USDINR pair is expected to continue trading towards the support level at 79.52 and break this level to start a new down ward trend towards 79.20 in this week.

Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities

“USDINR spot closed 6 paise lower at 79.52, due to softness in the US Dollar Index and FPI flows. USDINR has been rangebound between 79.20 and 80.10 for the past 6 weeks. We could see the range continue for this week as well.”

Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas

Indian rupee appreciated by 0.10% on Monday amid weak US Dollar and positive domestic equities. Dollar breached the 108-mark and is trading about 1% lower decline in safe haven appeal on the back of improved global risk sentiments. Euro also surged by 1.3% on reports that Ukraine has retaken some towns and cities in the Kharkiv region which is a setback for Russia. Rupee also gained on FII inflows. We expect Rupee to with a positive tone as rise in risk appetite in global markets and a weak Dollar may support Rupee. Sustained FII inflows may also favor the Rupee. However, worries over global economic slowdown and recovery in crude oil prices may restrict sharp upside. USDINR spot price is expected to trade in a range of Rs 79 to Rs 80.30 in next couple of sessions.”

Also Read: Will bulls push Nifty 50 to reclaim 18000? 5 key things to know before share market opening bell

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

“Rupee rose marginally as the dollar was weighed down against major crosses and also as market participants remained cautious ahead of the important inflation and IIP number that will be released on yesterday. Data showed inflation accelerated to 7% in August, driven by a surge in food prices, putting more pressure on the central bank to hike interest rates again later this month. Food inflation, rose 7.62% year on year in August, compared to a revised 6.69% in July. On the other hand, India’s annual industrial output in July rose 2.4% year-on-year, compared with the revised 12.7% growth in the previous month.”

“The dollar fell to its lowest level in more than two weeks against its basket of currencies following recent strong gains, as investors grew nervous ahead of U.S. inflation data. The New York Fed’s monthly consumer expectations survey showed that U.S. consumers’ inflation expectations slid further in August as gasoline prices extended their steep decline from June’s record high. Euro surged as policymakers at the ECB see increasing risks that the central bank will need to hike its key interest rate to 2% or more to curb record inflation in the euro zone. Today, market participants will be keeping an eye on the German economic sentiment to gauge a view for the currency. We expect the USDINR(Spot) to trade sideways and quote in the range of 79.20 and 79.80.”

(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.