The Indian rupee slumped past the 76 per dollar mark on Friday to touch its lowest level since mid-December, as the deepening crisis in Ukraine pushed Asian shares toward 16-month lows. Continuous foreign fund outflows and a weak trend in domestic equities too weighed on the currency. Last wee, Rupee weakened over 1 per cent, marking a second straight week of losses. The domestic currency is expected to depreciate on Monday due to risk aversion in global markets and uptick in dollar. Moreover, rising crude oil prices will continue to put pressure on the rupee. However, expectations of RBI intervention in forex markets may prevent further decline in the rupee, according to ICICI Direct.
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee came under pressure and extended its weakness as global crude oil prices continued their upward trajectory and as geopolitical uncertainty keeps most participants on the edge. This week, on the domestic front, industrial production number will be important to watch and inflation number will be released next week which is likely to trigger volatility for the currency. But at this point, uncertainty between Russia and Ukraine is influencing most of the currencies. We expect the USDINR(Spot) to trade sideways with a positive bias and quote in the range of 76.05 and 76.80.”
Tapish Pandey, Research Analyst, SMC Global Securities
“The Indian Rupee is likely to face Tough day as crude oil prices soared more than 10% in hectic trading on Monday as the risk of a U.S. and European ban on Russian product and delays in Iranian talks triggered what was shaping up as a major stagflationary shock for world markets. On domestic front, foreign institutional investors (FII) pulled pricey again Rs 7,631.02 Crore from Indian markets as participants remain on edge over Russia’s invasion of Ukraine.”
“For now, Dollar is facing resistance of upward trend line to be found near 76.75-76.80 levels sustain above which may head higher towards 77.00 marks while on lower side support is placed around 76.00 levels. Pricey crude oil, stronger dollar, FII outflows and threats of higher inflation and Possibly trade Deficit likely make rupee weaker. Overall trading setup is indicating Positive bias on current scenario and also volatility likely to persist in coming trading session hence we recommend follow to buy on dip strategy while keeping stop loss below 76.00 levels and we are expecting dollar rupee to trade in range of 76.00 to 77.00 levels.”
Kshitij Purohit, Lead Commodity & Currency at CapitalVia Global Research
“India’s traditionally non-interventionist central bank may allow further depreciation of Asia’s worst-performing currency since the start of the Ukraine conflict in the hope that a weaker rupee will increase export competitiveness and assist close gaps presumably widening due to rising oil costs. The rupee has lost 2.17% against the dollar since February 21, closing at 76.17 on Friday. Unprecedented turmoil over the last few decades has shown that the odds are stacked against the local currency. This week, as investors examine the global economic impact of the Russia-Ukraine situation, it has remained the most important topic for investors.”
“Technically, on the domestic front, USD/INR March has breached major resistance of 76.00-76.02 on 3 March and we saw continuation of the bullish momentum in the following day. In the upcoming session, we may witness prices getting challenged in 76.58-76.60 zone which is next immediate resistance zone. While on the downside, 76.18-76.15 levels may act as a relevant support area. We may also witness 15-SMA acting as a dynamic support on 15-Minute chart.”
