The Indian rupee hit a contemporary low of 77.63 towards the US greenback on Thursday after the US inflation information sparked a contemporary tumble in world equities. Domestic share markets additionally tanked 2% forward of India’s CPI inflation and IIP information launch in the present day. “Rupee is expected to remain under pressure today amid risk aversion in the global markets and strong dollar. Further, rupee may slip on persistent FII outflows and a surge in crude oil prices. Additionally, market participants will remain vigilant ahead of CPI data from the country which is likely to show that inflation remained above RBI’s comfort zone for the 4th consecutive month. USD-INR (May) is expected to trade in a range of 77.25-77.75,” ICICI Securities stated in a be aware.
Rupee slips on agency greenback, FII outflows, inflation and fee hike fears
After opening weaker at 77.46 on the interbank foreign exchange market, the native unit traded within the vary of 77.46 to 77.59 towards the buck. So far this 12 months, the American Currency is up 4.3% towards the Indian foreign money, based on Bloomberg information. “USDINR spot touched a fresh all time high of 77.62, after higher than expected inflation print in US pushed US Dollar Index to a fresh 20-year high. Weakness in equities was an add on force for the US Dollar. We suspect RBI may have sold $ to stem the decline in the Indian Rupee. Overall view is of a range, between 77.20 and 78.20 on spot,” stated Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities.
Heena Naik- Research Analyst – Currency, Angel One stated, “USDINR is likely to trade in a range-bound manner between 76.80 to 77.50 levels. Global equities are trading in red which is affecting local equities as well. Continuous outflows have kept the local unit under pressure. However, RBI is suspected to have intervened in the currency markets via exchange and offshore non-deliverable forwards. This is evident from the decreasing FX reserves which are currently at $597 billion.”
All dips on USDINR pair to be purchased
“Rupee opened today at 77.48 and was immediately sold off taking it lower to 77.59. RBI may be present slowing down the depreciation of Rupee. The US core inflation came higher making the case for rate hikes in US in next two meetings at 50 BPS each. The range for the day is 77.30 to 77.70 with all dips on the pair to be bought. Exporters may keep a stop loss of 77.25 and hold to their dollars while importers need to keep buying all dips as all Asian currencies as well as European currencies are down against dollar. The dollar index is at 104.03 while Brent is still above $ 106 per barrel,” stated Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.
According to CR Forex Advisors MD Amit Pabari, rupee is predicted to commerce within the vary of 77.10- 77.60 in the present day. “While the risk factors continue to dominate the global markets, domestically, RBI will try to hold up and act as a shield for the Indian rupee. The protection near 77.50 will be key in the short term before it moves towards 78.00 levels. Going further, the higher commodity and fuel prices, and continuous FII selling is going to put pressure on India’s current account deficit indicating weakness in the currency for a longer period of time. Overall, the USDINR will consolidate in the new broader range of 76.80 -78.50 in the short term,” he stated.
Source: www.financialexpress.com”