Rupee to depreciate on strong dollar, risk aversion in global markets; USDINR pair to trade in this range
By The Financial Express
The Indian Rupee opened lower at 82.63 per US dollar on Thursday amid weak global cues.
The domestic currency is expected to depreciate today on the back of risk aversion in global markets and a surge in crude oil prices.
Market sentiments were hurt as the US Fed signaled that rates may move even higher than previously expected to control inflation, and no policymakers are projecting rate cuts next year.
“Investors will remain vigilant ahead of ECB and BoE monetary policy, where both central banks are likely to raise interest rates.
US$INR (December) is likely to trade in a range of 82.35-82.80,” said ICICIdirect.
In the previous session, the rupee gained 15 paise to settle at 82.45 (provisional) against the greenback.
Rupee (INR) Outlook
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“In line with expectation, the Fed raised rates by 50bps after raising interest rates by 75 basis points at four successive meetings.
The FOMC statement retained language saying “ongoing” hikes will be appropriate to reach a “sufficiently restrictive” stance that returns inflation to 2% over time.
Reaction to the dollar was marginally positive as the overall statement was hawkish.
Today, the focus will be on the ECB and the BoE policy statement and is likely to provide cues to the major crosses.
We expect the USDINR(Spot) to trade sideways and quote in the range of 82.20 and 82.80.”
Dilip Parmar, Research Analyst, HDFC Securities
“The Indian rupee recouped this week’s loss after the dollar retreated overnight following ease in inflations.
The expectation of corporate dollar inflows and risk-on sentiments supported the local unit in today’s trade.
The money market priced in a 50bps hike, but traders will eye on a dot plot, with a revision likely to take the median to 4.875%.
Even after Wednesday’s downtick, the spot USDINR trend remains bullish as long as it floats above 81.70 level while on the higher side psychological level of 83 remains the near-term hurdle.”
Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities
“USDINR spot closed 34 paise lower at 82.46, on the back of lower than expected US CPI and hopes that Fed today will signal that rates will peak in Feb/march of next year around 5%.
The rupee remains undervalued to its peers and if Fed sounds dovish, it can help Rupee appreciate towards 82.00/81.80 levels on spot.
We expect a range of 81.80 and 82.80 on spot.”
Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas
“Indian Rupee appreciated by 0.40% on Wednesday on improved global risk sentiments amid weak US Dollar and positive domestic stock markets.
FII inflows also supported Rupee.
US Dollar fell to a 6-month low as US CPI inflation declined to 7.1% y-o-y in November, below expectations of 7.3% while core CPI inflation declined to 6% below estimates of 6.1%.
USDINR spot price is expected to trade in a range of Rs 81.50 to Rs 83.30.
Amit Pabari, MD, CR Forex Advisors
“The Indian Rupee majorly remained unaffected. In an initial reaction to the Fed policy, it was seen depreciating to 82.64, before retracing back to 82.50 levels.
For the day, the likely range would be 82.10 to 82.80.
The factors impacting the Rupee- oil prices, FII flows, peer currency, and USD have been supportive and suggest an appreciating move in the near term.
The RBI has been resilient concerning the Indian Rupee’s recent volatility but could start rescue operations to finish the Calendar Year on a good note.
Thus, the uptick could be restricted up to 82.75 to 83.00 levels, and correction below 82.00 and a move towards 81.50-81.20 seems very much likely on the card.”
