The Indian rupee opened marginally higher at 81.72 per dollar on Wednesday versus the previous close of 81.78. The local unit is likely to appreciate further today amid a rise in risk appetite in global markets and softening of crude oil prices. Further expectation of a decline in US CPI numbers could force the Fed to change its hawkish stance, leading to a weakening dollar. “US$INR (January) is expected to trade in a range of 81.40-82.20 with a weaker bias,” said analysts at ICICIdirect.
Rupee likely to say strong amid weak dollar, declining crude prices
“The earlier negative divergence between the DXY and Rupee is now starting to converge with the trend, which will keep the Rupee higher. Weakness in the oil prices is likely to further reduce the pressure on the Rupee as oil companies would step back. Overall, we expect the Rupee to trade higher and if 81.50 is taken out and RBI remains absent, the unit is moving towards 81.00 levels, keeping the range for the week between 81.00-81.80 levels,” said Amit Pabari, MD, CR Forex Advisors.
USDINR near-term outlook bearish
“The Indian rupee becomes the best performer among the Asian currencies following stop order triggers and inflows from bond selling. The local unit witnessed the biggest single-day gains after November 11 and broke the psychological level of 82 as the traders rush to cover the positions. Spot USDINR now has the support of 81.70, the 50% Fibonacci retracement adjoining the November 14 low of 80.51 and the January 03 high of 82.94. The near-term view remains bearish for the pair and a level below 81.70 will pave way for 81.45 while on the higher side 82.10 acts as resistance,” said Dilip Parmar, Research Analyst, HDFC Securities.
Rupee may head towards 81 mark soon
“USDINR spot closed 57 paise lower at 81.78, lowest level since December 5th, 2022. Corporate inflows triggered the sharp decline. Once prices drifted below 82.10, dealer stops were hit and prices accelerated downward. Over the near term, USDINR can fall further, to catch up with the other USD peers. We expect a broad range of 81.00 and 82.20 on spot,” said Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.
(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.)