The Indian rupee opened lower at 81.59 per dollar on Tuesday against the previous close of 81.50. The local unit is likely to depreciate today amid a strong dollar and persistent FII outflows. Moreover, investors will closely watch key macroeconomic data from the US like CB consumer confidence, which is expected to increase from 108.3 to 109. Meanwhile, a sharp fall in the rupee may be prevented on a rise in risk appetite in global markets as the Fed is likely to lower the size of rate increase for a second straight meeting. “US$INR is likely to break the key resistance level of 81.72 to start trading towards the level of 81.85,” said ICICIdirect.
USDINR to trade sideways
“Rupee traded in a narrow range in the last few sessions and volatility has been low as market participants remained cautious ahead of the announcement of the Union budget. Investors will be awaiting announcement on the fiscal deficit target and that would be important for the rupee. Apart from the fiscal target, disinvestment targets set by the government could also influence the rupee. Yesterday, dollar rose marginally against its major crosses and the focus will be on consumer confidence data. A higher number could extend gains for the greenback. We expect the USDINR(Spot) to trade sideways and quote in the range of 81.10 and 81.60,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Economic Survey, Budget 2023 eyed
“We expect Rupee to trade with a slight negative bias amid a weak tone in the domestic markets and expectations that US Dollar may rise on safe-haven appeal. Month-end Dollar demand from importers and selling pressure from FIIs may also put downside pressure on Rupee. Traders may remain cautious ahead of India’s union budget and US FOMC meeting later this week. USDINR spot price is expected to trade in a range of Rs 81 to Rs 82.20,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
Gains in rupee past 80.80 to be limited
FPIs continue to remain net sellers and withdrew another whopping Rs 6,793 crore in the previous session making the net outflows of the first month of the year around $2.5 billion, which limited the gains in the rupee this month. “A range of 80.80 to 82.20 levels is likely to remain in place as gains past 80.80 could be limited by RBI and losses shall be capped around 82.00-82.20 levels amid an otherwise stable position. Hence, 80.80-81.20 makes for a good buying zone, and between 81.80-82.20, selling can be initiated, ” said Amit Pabari, MD, CR Forex Advisors.
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