Rupee opens flat, may appreciate on weaker dollar, positive markets; USDINR to trade sideways in this range

Rupee opens flat, may appreciate on weaker dollar, positive markets; USDINR to trade sideways in this range

The Indian rupee opened marginally higher at 81.74 per dollar on Wednesday against the previous close of 81.76 per dollar. The local unit is expected to appreciate amid softness in the dollar ahead of expectation of weaker retail sales numbers. Further, US PPI is expected to decline towards -0.1%. The softness in the US PPI would diminish the bets of aggressive rate hike by Fed. “US$INR is likely to face key resistance of 50 day EMA at 82 and slide towards the initial supports at 81.40 and 81.20,” said ICICIdirect. Over the last two sessions, Rupee has come under pressure on dollar purchases from public sector banks (PSBs) and on position adjustments by speculators.Rupee to trade sideways

On Tuesday, Rupee consolidated in a narrow range after witnessing volatility in the last few sessions. “Market participants remain cautious ahead of Bank of Japan policy statement. Expectation is that the central bank could keep its commentary hawkish. While there is little expectation for a change in their policy rate which is currently at -0.10%, another change in the target range of long-end yields is being debated. US retail sales number will also be released and better-than-expected data could extend gains for the greenback,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services. The market is starting to further price in expectations that the BoE will need to act early next month to temper ongoing inflationary pressures. “We expect the USDINR(Spot) to trade sideways and quote in the range of 81.20 and 81.80,” he added.

USDINR to remain range-bound this week

“USDINR spot closed 14 paise higher at 81.76, due to alleged dollar demand from oilers and nationalised banks. Weakness in the Asian currencies against USD also contributed to the upside in USDINR. Over the rest of the week, we expect USDINR to remain ranged between 81.40 and 82.00 levels on spot,” said Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.