Rupee opens lower, may depreciate further on strength in US dollar, elevated crude oil prices

Rupee opened lower on Wednesday, and may depreciate further on strong dollar and re-bounce in crude oil prices.

Rupee opens lower, may depreciate further on strength in US dollar, elevated crude oil prices
Rupee opened weak at 82.76 against the dollar at the interbank foreign exchange, and then inched higher to 82.75, registering a decline of 5 paise over its last close.

The Indian rupee depreciated 5 paise to 82.75 against the US dollar in early trade as strength in US dollar and firm crude prices in global markets weighed on the domestic currency. The local unit is expected to depreciate further, tracking weakness in equity markets. Volatility in the USDINR pair is likely to continue, according to analysts. Additionally, market participants will keep an eye on RBI MPC minutes and major economic data from the US to gauge the economic health of the country. “US$INR (December) is facing strong resistance near 82.97. As long as it sustains below this level it may slip further till 82.50,” said ICICIdirect.

Rupee Outlook

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

“Japanese Yen strengthened to the highest level in four months after the Bank of Japan with a surprise tweak to its bond yield control program. While it kept broad policy settings unchanged – pinning short-term JGB yields at -0.1% and the 10-year yield around zero – the BOJ decided to let long-term yields move 50 bps either side of its 0% target, wider than the 25 basis point band previously. Today, market participants will be keeping an eye on the consumer confidence number from the US. Better-than-expected economic data could support the dollar at lower levels. We expect the USDINR(Spot) to trade sideways and quote in the range of 82.40  and 83.05.”

Rahul Kalantri, VP Commodities, Mehta Equities Ltd

The USDINR 28 December futures contract traded sideways. On the daily technical chart the pair is trading above its resistance level of 82.50. RSI is fetching above 55 levels and MACD is showing positive divergence on the daily technical chart. Looking at the technical set-up, the pair is showing positive divergence on the daily technical charts but facing steep resistance around 82.85-83.10 levels. We expect volatility in the pair to continue and are expected to trade in the range of 82.20-83.10 and either side breakout of the range could give further directions.

Anand James – Chief Market Strategist at Geojit Financial Services

Upsides stalled after briefly piercing 82.8 earmarked yesterday. Declines failed to gather momentum either resigning the trend into a sideways mode for today. The congestion region is seen near 82.60-82.70, in the vicinity of which, USDINR is likely to stick for the most part, but a break past 82.88-82.29 would signal directional moves.

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First published on: 21-12-2022 at 10:15 IST