Weak equity markets, elevated crude oil prices and weak monsoon seem to be weighing on Indian rupee besides the strong dollar which gained strength after the US Federal Reserve Chairman indicated towards a rate cut in the upcoming policy. Today, the rupee opened at 69.12 a dollar against the last close of 69.04 a dollar. Since last 15-20 days it has been under pressure and likely to remain under pressure for a week, according to analysts Financial Express Online spoke to.
“After the dovish comments by US Federal Reserve Chairman Jerome Powell, the US dollar gained momentum against its peers. Crude oil prices are also at elevated levels. Weak monsoon and sell-off in the equity markets are also putting pressure on the currency. Considering all these factors, the rupee is likely to remain under pressure for a week and may depreciate to 69.40 a dollar,” Ajay Kedia, Director, Kedia Commodity told Financial Express Online.
The rupee is likely to consolidate in a range between resistance at 69.30 and support at 68.70 for the next 3-4 sessions. Falling domestic equity markets and higher dollar index are putting pressure on rupee while inflows in debt segment are supporting the currency, according to Amit Sajeja, Associate Vice President, Motilal Oswal Financial Services.
The equity market has been on a losing streak since seven trading sessions. Today, also the Indian headline indices – Sensex and Nifty opened lower tracking global cues. At 10:08 AM, while the Sensex was seen trading at a level of 37,755.52, down 75.46 points from the previous session, Nifty was seen at 11,235.05, lower by 17.05 points from the previous settlement. Meanwhile, the Brent crude futures, the international benchmark for oil, rose 0.09 per cent to USD 63.45 per barrel. As on Jul 26, the foreign institutional investors offloaded equity worth Rs 126.65 crore on a net basis, while the domestic institutional investors or DII’s bought equity worth Rs 398.53 crore.