the volatility in spot may continue and 75.30-75.50 will act as a strong support and we may see a bounce towards 76.50 level, says Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
Indian currency market to remain shut today on account of Buddha Purnima.
On May 6, the rupee ended 13 paise lower at 75.76 per dollar, amid volatile trade seen in the domestic equity market.
"May is usually a weak month for rupee. This week's market remained range bound in between 75.50-75.80 range. The risk tone has been tepid and will remain like that on renewed US-China spat," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
"The trade war can reignite going ahead and prop up the safe haven dollar demand. Also, coronavirus cases are increasing, stocking fears of second wave of infection."
"Locally, there are concerns over macros, due to the extension in lockdown, India's GDP is expected to fall near 1%. While the market is eagerly waiting for more stimulus measures from the government. So, the volatility in spot may continue and 75.30-75.50 will act as strong support and we may see a bounce towards 76.50 level," he added.
Also Read - Rupee likely to trade in 75-77 range against US dollar in till May-end
Oil prices rose on Thursday after U.S. inventories swelled less than expected, but market watchers predicted further gains could be capped by the ongoing glut in crude supplies as the coronavirus pandemic crushes fuel demand.
"The resurfacing of trade tensions between the US and China has again led the rupee to traverse on the declining path. Origin of coronavirus which has inflicted severe global economic damage is the point of contention between the two, and President Trump has threatened fresh tariffs to penalise China," said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.
"Sentiments have also taken a beating amid weak PMI manufacturing numbers, underscoring the impact of coronavirus on the economy, where the overall trend in rupee looks skewed on the downside."
"The IIP numbers ahead are expected to be weak and are going to further worsen the rupee-dollar equation. However, reopening of various economies in a phased manner has boosted risk appetite to some extent and is underpinning the rupee, where 77 mark is guarding it from further depreciation," she added.First Anniversary Offer: Subscribe to Moneycontrol PRO’s annual plan for ₹1/- per day for the first year and claim exclusive benefits worth ₹20,000. Coupon code: PRO365
