The Indian Rupee is likely to edge higher this week. Volatility for major crosses could be limited as no major economic data is expected to be released from the US. For the day, USDINR (Spot) is expected to trade sideways with a positive bias and quote in the range of 76.20 and 76.80. In the previous session, the rupee declined 32 paise against the US dollar, in line with a sell-off in domestic equities and a firm greenback in the overseas markets. Persistent FII outflows also dented investor sentiment. At the interbank forex market, the local unit opened sharply lower at 76.31 against the American currency and lost further ground during the session. It witnessed an intra-day high of 76.19 and a low of 76.50 before settling at 76.49, a fall of 32 paise over its previous close of 76.17.
Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities
“USDINR spot closed 33 paise higher at 76.48, on the back of dollar demand from large corporates and speculative buying on account of weakness in stocks. Overnight hawkish comments from US central bank chief has increased odds of a 75bps rate hike in upcoming FOMC meetings. This is a major reason why USDINR has been bid all day. A strong US Dollar Index and weak Chinese Yuan is adding to the downward pressure on Rupee. Over this week, USDINR can drift higher towards 76.80/77 levels on spot. Range could be 76.30 and 77.00.”
Amit Pabari, MD, CR Forex Advisors
“The local currency is expected to kick off the day around the 76.50 mark and is likely to trade in the range of 76.30 to 76.70 zone. The US dollar index regained its ground to trade at the highest level since March 2020. The EM FX can be seen on a negative mode this month, but the Rupee has been reluctant to fall even by an average due to RBI and exporters’ selling stance. This week, the focus will be on US preliminary GDP and core PCE inflation data. Domestic equities are shaking their hands with weaker Asian markets. The higher US yields and aggressive fed hike bets will surely lead overvalued equities towards mean-reverting levels. The fundamentals could try to outweigh the flow story and the Rupee could depreciate. But RBI’s action would be a game-changer. Overall, the short-term range is likely to be revised to 75.70 to 77.00.”
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee consolidated in a broad range despite weakness in domestic and global equities and a rally in the dollar against its major crosses. Meanwhile, pound fell against the dollar after U.K. retail sales plunged more than forecast in March as the cost-of-living crisis squeezed incomes and consumers braced for higher taxes and energy bills. the volume of goods sold in stores and online dropped 1.4% after falling 0.5% in February. Fall for the Euro in the Asian session was restricted after French President Emmanuel Macron won re-election convincingly defeating his rival Marine Le Pen and prompting a wave of relief in Europe that the far-right had been kept out of power. Today, Volatility for major crosses could be limited as no major economic data is expected to be released from the US. For the day, we expect the USDINR (Spot) to trade sideways with a positive bias and quote in the range of 76.20 and 76.80.”
Rahul Kalantri, VP Commodities, Mehta Equities
“USDINR 27April futures contract showed very high volatility last week and slipped again. On the weekly technical chart a pair is trading above its resistance level of 76.15. We observed that a pair is showing positive momentum on the technical chart and if it continues to sustain above 76.15 could test 76.70-76.85 levels again; 76.06 acts as major support on daily closing basis. We suggest buying in the pair above 76.35 with a stop loss below 76.06 on a daily closing basis for the targets of 76.70-76.85.”
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