Rupee likely to remain steady against US dollar amid mixed cues; USDINR pair to trade sideways in this range

Rupee likely to remain steady against US dollar amid mixed cues; USDINR pair to trade sideways in this range

The Indian rupee is expected to trade steady on Tuesday against amid recovery in regional fears, cautious market sentiments, falling crude prices and strong dollar. USDINR spot price is expected to trade in a range of Rs 79.20 to Rs 80.80 in next couple of sessions. In the previous session, spot USDINR opened at a life low of 80.07 and gained to 80.13 before settling at 79.97 on probable central bank interventions and pullback in the dollar index. The RBI’s dollar selling led to the rupee to recover past the 80 mark and end the day with only a small loss of 9 paise at 79.96 against the previous close of 79.87 to the dollar, according to forex analysts.

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“The Fed’s Quantitative Tightening (QT) is set to ramp up this week which will support the dollar bulls. To reduce its $9 trillion portfolio, the central bank will boost its monthly caps for the amount of Treasuries and holdings of MBS that it’ll let mature to $60 billion and $35 billion, respectively. The Fed has $43.6 billion of Treasury coupons maturing in September, which means that officials will need to let go of $16.4 billion of bills as well.”

Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas

“Indian rupee depreciated on Monday and touched an all-time low of 80.13 on strong Dollar and deteriorating global risk sentiments. Global markets fell sharply by more than 2% amid hawkish speech by Fed Chair Powell. He reiterated Fed’s hawkish stance and said that the FOMC’s focus is to bring down inflation to their goal of 2% and that the central bank will keep tightening till inflation in controlled. This may lead to slower growth, higher interest rates and softer labour market conditions along with pain to households and businesses.”

“We expect Rupee to trade on negative note on strong Dollar and weak global market sentiments. Concerns over global economic slowdown and inflation worries may also put pressure on Rupee. Markets may also remain cautious ahead of India’s GDP, manufacturing PMI and trade deficit data later this week. Traders may also remain alert ahead of US consumer confidence, ISM Manufacturing PMI and non-farm payrolls data this week. USDINR spot price is expected to trade in a range of Rs 79.20 to Rs 80.80 in next couple of sessions.”

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

“Rupee fell to fresh all-time lows after hawkish comments from the Fed Chairman at the Jackson Hole symposium. Fed Chairman said the U.S. economy will need tight monetary policy “for some time” before inflation is under control. Powell gave no indication on Friday of how high rates might rise before the Fed is finished, only that they will go as high as needed. This week focus will be on the employment number that will be released from the US. We expect the USDINR(Spot) to trade sideways with a positive bias and quote in the range of 79.70 and 80.50.”