Rupee likely to appreciate on weak dollar; USDINR pair to trade with positive bias in this range

Rupee likely to appreciate on weak dollar; USDINR pair to trade with positive bias in this range

The Indian Rupee is likely to appreciate on Tuesday amid a weak dollar. “Investors will closely watch consumer confidence data as it is expected to fall from 106.4 to 100.4. However, the rupee may be pressurised by a rebound in crude oil prices. US$INR is expected to trade in the range of 78.50 to 78.30,” said ICICIDirect. In the previous session, the rupee slipped 1 paise to close at its fresh life-time low of 78.34 (provisional) against US dollar despite a rally in the domestic equity markets. Firm crude oil prices in the international market and unabated foreign capital outflows also put pressure on the domestic unit. However, a weak dollar overseas supported the local currency.Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking

“The Indian rupee has tip-toed to a fresh record low of 78.43 amid persistent foreign funds outflows, weaker macro data, and slowdown fears gripping the markets. The currency has drifted on the downwards trajectory despite the softness seen in the greenback, as domestic equity indices erased much of the early session gains. Besides, India’s forex reserves have witnessed a fall for the third consecutive week to $590.59 billion as the RBI is stepping up its intervention in the forex markets to curb the steep decline in the Indian rupee.”

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

“Rupee fell to fresh all-time lows in the last hour of the session following broader strength in the dollar against its major crosses. Rupee was weighed down also as oil prices climbed following last week’s rout, as the G7 nations promised to tighten the squeeze on Russia’s finances with new sanctions that include a plan to cap the price of Russian oil. Dollar gained later in the day after data showed new orders for U.S.-made capital goods and shipments increased solidly in May, pointing to sustained strength in business spending on equipment in the second quarter.”

“Meanwhile, the euro was buoyed by expectations that the European Central Bank will soon raise interest rates for the first time in more than a decade. Today, focus will be on the consumer confidence and trade balance number from the US. Better-than-expected economic data could extend gains for the dollar.We expect the USDINR(Spot) to trade with a positive bias and quote in the range of 77.70 and 78.50.”

(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.)