The Indian rupee is expected to depreciate on Monday amid strong dollar and surge in crude oil prices. The dollar is hovering near its five-week high on rising bet for prolonged Fed policy tightening after Labour department revised its CPI data higher for prior three months. Additionally, university of Michigan surveys showed one year inflation outlook of 4.2%, higher than the final number in January. Meanwhile, investors await CPI data from India, which is likely to remain under RBI’s comfort zone for a third consecutive month. “The US$INR likely to trade towards the level of 82.85 for the day,” said ICICIdirect.
Rupee (Spot) to quote in 82.40 – 82.90 range
“Rupee appreciated marginally but continued to trade in a narrow range even as the dollar rose from its recent lows. Today, focus will be on the inflation number; expectation is that inflation could rise by 5.9% as compared to 5.72% in the previous month. Bond yields jumped after the RBI highlighted core inflation concerns, keeping the door open for another hike. Inflation from the US will be released tomorrow and is likely to trigger volatility for the dollar. We expect the USDINR(Spot) to trade sideways and quote in the range of 82.40 and 82.90,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
“A consolidatory phase continues in USDINR, with bulls with all their efforts are not allowing the pair to move below 82.50 mark sustainably. The current divergence of USDINR from the fall in DXY and the rise in EM currencies is yet to be filled, and would apparently be pushed by the inflows pertaining to expected FDI’s. If the pair breaks 82.40 levels and sustains therein, there is an 80% probability of it moving towards 82.00 first, followed by 81.80 levels. On the flip side, 82.80-83.00 remains a solid resistance zone and is less likely to be taken out,” said Amit Pabari, MD, CR Forex Advisors.
Rupee to trade with a slight negative bias
“We expect Rupee to trade with a slight negative bias amid risk aversion in global markets and sharp pullback in crude oil prices. Strong Dollar on hawkish tone of Fed may also put pressure on Rupee. Markets participants may remain cautious ahead of IIP data from India and Michigan consumer sentiment from US. USDINR spot price is expected to trade in a range of Rs 82 to Rs 83.30,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
USDINR to remain rangebound
“USDINR spot closed 1 paise lower at 82.50 in another day of lackluster trading on Friday. Due to lack of fresh triggers, markets remain ranged. Over the next week, we could see USDINR trade within a range of 82.30 and 82.80 on spot,” said Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.