Rupee to remain steady amid strong dollar, rise in risk tolerance in markets; USDINR to trade in this range

Rupee to remain steady amid strong dollar, rise in risk tolerance in markets; USDINR to trade in this range

The Indian rupee is expected to remain steady amid strong dollar, elevated crude prices, rise in risk tolerance in equity markets. For today, spot USDINR is likely to trade in the range of 79.50 to 79.80 with a negative bias. In the previous session, rupee firmed against the US dollar amid a drop in crude prices, but gains were capped as importers and oil companies sought the American currency. The rupee ended at 79.71 per dollar, up from its previous close of 79.90. The domestic unit had strengthened to 79.66 during the session, lifted by a recovery in Asian currencies as the dollar index eased from a two-decade high.

Also Read: Nifty short-term trend positive, may move to 18000 once 17800 breached; 5 things to know before opening bell

“The Indian Rupee could open flat but heads for the second weekly gains following recovery in risk assets and foreign fund inflows. Overnight, the dollar falls in a corrective move into the weekend ahead of US inflation data next week. On Thursday, spot USDINR fell 19 paise or 0.23%, the biggest one-day fall of the September month, amid risk-on moods supported by foreign fund inflows. Technically, the pair is still in the broad range of 79 to 80 and directional movement can only be seen only after breakout or breakdown. For today, spot USDINR is likely to trade in the range of 79.50 to 79.80 with a negative bias.”

Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities

“USDINR spot closed 20 paise lower due to risk on mood in equity markets. Indian Rupee continues to be an outperformer, aided by lower oil prices and FPI inflows. RBI remains an aggressive seller near 80 handle. Global backdrop is conducive for USD strength but that would play out by way of limiting the gains in Rupee, rather than pushing it below 80 against USD. Therefore, we could see more rangebound and low volatility price action over the near term. Range: 79.30 and 80.10 on spot.”

Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services

“Rupee traded in a narrow range ahead of the important ECB policy statement that was released yesterday. The ECB Bank raised interest rates by an unprecedented 75 basis points to tame runaway inflation, even as a recession is now increasingly likely as the bloc has lost access to vital Russian natural gas.The central bank raised the main refinancing rate to 1.25%, their highest level since 2011. The large hike comes as the ECB increased its own inflation forecasts and continues to see price growth well above its 2% target throughout its entire projection horizon.”

Also Read: Share Market LIVE: Nifty, Sensex stare at positive start; ECB raises rates by an unprecedented 75 bps

“Euro did witness volatility but hawkish statement kept the currency supported at lower level. On the other hand, Federal Reserve Chair Powell reiterated that the U.S. central bank will continue to raise interest rates in order to tame surging inflation and warned against prematurely loosening monetary policy. U.S. rate futures have priced in an 87% chance the Fed will hike by another 75 bps at this month’s meeting, which would increase the Fed funds rate to 3.0% to 3.25%. Today, volatility could remain low as no major economic data is expected t be released from the US. We expect the USDINR(Spot) to trade sideways and quote in the range of 79.40 and 80.05.”

(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)