Rupee may depreciate against US dollar amid fragile risk sentiments in markets; USDINR to trade in this range

The Indian Rupee is likely to depreciate on strong dollar, fragile risk sentiments in global markets. However, losses may be capped by falling crude prices, FII selling slowdown and positive equity markets, according to analysts.

Rupee may depreciate against US dollar amid fragile risk sentiments in markets; USDINR to trade in this range
USDINR(Spot) is expected to trade with a positive bias and quote in the range of 79.70 and 80.40.

The Indian Rupee is likely to depreciate on strong dollar, fragile risk sentiments in global markets. However, losses may be capped by falling crude prices, FII selling slowdown and positive equity markets, according to analysts. USDINR(Spot) is expected to trade with a positive bias and quote in the range of 79.70 and 80.40. In the previous session, rupee declined to close below the 80 mark for the first time against the US dollar due to strong dollar demand from importers amid high crude oil prices. At the interbank foreign exchange market, the local unit opened at 79.91 and later slid to a close at a low of 80.05 to a dollar, down 13 paise from its previous close.

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

“USDINR spot closed 5 paise higher at 79.99, high of the day. Demand for USD from oil marketing companies and weakness in Yuan added to the demand for USDINR. Over the near term, we expect USDINR to trade with an upward bias, driven by fragile global risk sentiments. We could see a range of 79.60 and 80.40 on spot.”

Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas

“Indian rupee traded on a flat note yesterday. Rupee opened in the green on weak dollar and surge in domestic equity markets. However, concerns over twin deficits capped sharp gains. Dollar fell on decline in safe haven appeal amid positive global risk sentiments and weak housing data from US. We expect Rupee to trade with a negative bias as rising current account deficit and trade deficit may put pressure on Rupee. Dollar may also strengthen again on expectations of an aggressive rate hike by Fed later this month. Traders may also take cues from existing home sales data from US later today which is expected to remain weak. USDINR spot price is expected to trade in a range of Rs 79.20 to Rs 80.80 in next couple of sessions.”

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

“Rupee consolidated in a narrow range for the whole of the session but was weighed down in the latter hour of the session following broad strength in the dollar against its major crosses. Market participants remain cautious ahead of the important ECB policy statement that will be released today. Apart from ECB policy statement, focus will also be on the Philly Fed Manufacturing Index that will be released from the US. Better-than-expected economic data could extend gains for the dollar. We expect the USDINR(Spot) to trade with a positive bias and quote in the range of 79.70 and 80.40.”

Amit Pabari, MD, CR Forex Advisors

“USDINR has been trading between 80-80.25 levels in NDF in the past few sessions and in onshore the RBI seems to be protecting the breach above 80 levels. So far the Bank has offloaded over $50 billion in reserves but as the global sentiments are negative, it hasn’t helped the rupee more than slowing down the depreciation pace. The intraday price action movement clearly signifies that there is a heavy demand for the dollar pushing the USDINR pair on the upside. If the 80 mark is taken out convincingly, the panic button could get triggered and 81.00 to 81.50 levels will remain on the cards.”

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