Rupee likely to remain steady amid positive cues; USDINR pair may trade sideways in this range

Rupee likely to remain steady amid positive cues; USDINR pair may trade sideways in this range

The Indian rupee is expected to trade strady today amid rise in risk tolerance in equity markets. The rupee has depreciated around 9.30 per cent since 3 January. Analysts expect RBI intervention to increase if USDINR moves above 82 levels. In the previous session, rupee fell against the US dollar as heavy selling pressure in the domestic equities and a spike in crude oil prices weighed on the local unit. Besides, a stronger American currency against key rivals and persistent foreign fund outflows put more pressure on the domestic currency, according to forex dealers. At the interbank foreign exchange market, rupee opened weak at 81.65, fell further to finally end at 81.89, down 49 paise over its previous close.

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“Indian rupee depreciated by 0.51% on Monday on weak domestic markets and surge in crude oil prices. Disappointing macroeconomic data also weighed on Rupee. India’s Manufacturing PMI slipped to 55.1 in September, trailing estimates of 55.80 and previous month’s reading of 56.2. However, a soft US Dollar cushioned the downside. We expect Rupee to trade with a negative bias on risk aversion in global markets amid concerns over financial health of Credit Suisse. Concerns over global economic slowdown may also put downside pressure on Rupee. However, any measures by RBI may prevent sharp fall in Rupee. Rupee may also take cues from India’s trade deficit and US ISM manufacturing PMI data. USDINR spot price is expected to trade in a range of Rs 80.50 to Rs 83 in next couple of sessions.”

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

“USDINR spot closed 53 paise higher 81.87, whisker away from the closing all time high of 81.94. Strong demand for dollars from large corporates and FPIs kept the pressure on the currency. Over this week, major trigger remains US ISM surveys and jobs data. We could see RBI intervention increase, if USDINR move above 82 levels. An overall range of 81.50 and 82.30 remains in focus.”

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

“Rupee came under pressure marginally in the first half of the session and volatility remained high after mediareports of the U-turn to its highest level since Sept. 22, the day before British Finance Minister roiled markets with a new “growth plan” to cut taxes and regulation, funded by vast government borrowing. British finance minister said he would publish details “shortly” on how he planned to bring down public debt as a share of economic output over the medium term.”

“On the other hand, crude rose after that the OPEC+ group of oil producers is discussing potential output cuts of more than 1 million barrels per day also weighed on the currency, given Europe’s precarious energy situation. Dollar weakened after data released from the US showed manufacturing activity increased at its slowest pace in nearly 2-1/2 years in September as new orders contracted. Today, focus will be on the factory order number that will be released from the US; better-than-expected data could extend gains for the dollar. We expect the USDINR(Spot) to trade sideways and quote in the range of 81.20 and 81.80.”

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Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors

“Indian rupee to open at 81.57 as Dow rises 700 points and SGX nifty is higher by 225 points. The dollar index was at 111.80 as Asian currencies rises slightly against the dollar. Oil prices rose to $ 89.22 on account of risk on sentiments as OPEC meeting tomorrow to cut production keeps oil well bid. RBI was yesterday present at 81.90 and above protecting the rupee from further depreciation. Rupee to remain in a range of 81.30 to 82.00. Importers are to buy the dips and exporters are to sell only above 81.85 levels.”

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