The rupee may gradually come under pressure this week due to strength in the dollar index. After weak set of India's economic data focus will now shift to the Union Budget.
The rupee opened flat on Monday at 71.07 against the US dollar, due to a spike in crude oil prices in the international market. “Rupee remained in range to trade at 71.10 on buying by nationalised banks likely on behalf of oil importers. US retail sales increased for a third straight month in December and the number of Americans filing claims for unemployment benefits dropped for a fifth straight week last week, indicating the labour market remained strong,” Ajay Kedia, Managing Director and Research Head, Kedia Advisories said. At 11.20 AM, the rupee was trading at 71.06 against the US dollar as compared to the previous close of 71.08 a dollar.
“India’s annual retail inflation has accelerated to its highest level in more than five years, increasing the likelihood of an extended pause in the central bank’s rate-cutting cycle,” Ajay Kedia said. The S&P BSE Sensex was trading 178 points, or 0.42 per cent lower, at 41,768 points, while the Nifty 50 index was trading at 12,294 points, down 0.47 per cent or 58 points in Monday’s trade. Earlier in the morning, S&P BSE Sensex jumped 328.50 points to a record high of 42,273.87 points, while the NSE’s Nifty50 index breached the crucial 12,400 level for the first time ever to touch 12,430.50, up 78.15 points
Rupee outlook for this week
“The rupee may gradually come under pressure this week due to strength in the dollar index. After weak set of India’s economic data focus will now shift to the Union Budget. The government may take a couple of measures to tackle a slowdown in the economy. Rupee will also continue to track geopolitical developments in the Middle East and crude oil prices,” Rushabh Maru, Research Analyst, Currency and Commodity, Anand Rathi Shares and Stock Brokers, said.