The Indian rupee is likely on Friday majorly on the back of weak dollar. Dollar is showing weakness on anticipation that the central bank will reduce the pace of rate hikes. Additionally, market participants will remain cautious ahead of key job report from the US as it influences Fed’s policy decision. Meanwhile, a surge in crude oil prices may prevent sharp gains in rupee. “USDINR (Dec) may trade in a range of 81.05- 81.50,” said ICICIdirect. In the previous session, rupee finished stronger against the dollar as global markets were buoyed by the US Federal Reserve Chair Jerome Powell’s comments that were less hawkish than expected. The partially convertible rupee ended at 81.21 per dollar, compared to its previous close of 81.42.
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“Rupee extended its gains in yesterday’s session after Fed Chairman signaled a likely slowdown in the pace of tightening in December, while indicating that more hikes will be necessary to curb inflation. Recently released Fed meeting minutes also showed that officials could opt for a 50bps rate ad compared to 75bps hike done earlier. Major crosses continued to gain momentum following broad weakness in the dollar. Dollar was weighed down yesterday also after core PCE index rose 0.2% in October, slightly below the estimate.”
“On the other hand, a widely followed gauge of manufacturing activity posted its lowest reading in two and a half years for November. Today focus will be on the non-farm payrolls number that will be released from the US. Better-than-expected economic data could keep the dollar supported at lower levels. We expect the USDINR(Spot) to trade sideways and quote in the range of 81.20 and 81.80.
Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities
“The FED chair Jerome Powell in his speech hinted towards a slower tightening pace starting December. This lightened up the mood of the market and pushed the dollar lower. From the USDINR point of view, the pair has been holding 81.00 levels on the December futures front. In the sessions to come, as long as the pair manages to sustain above the 81.00 mark, we might see a range-bound action between 81.00 and 82.00.”
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Amit Pabari, MD, CR Forex Advisors
“The Indian rupee rose in November by more than 1.70%, marking its first monthly gain this year and ending its longest losing streak in nearly four decades as the USD entered into a strong bearish trend. Yesterday, the USDINR pair had tested the 81 mark for a few minutes but oil marketing companies and importer’s rush along with an intraday fall in Yuan spark a rally towards 81.30 levels. The lower spot has been a double-whammy for the exporters as from another end they are receiving the lowest premium in over a decade.”
“Further, a rally in Rupee was seen as both- SENSEX and NIFTY were testing their skies, where none of the global markets are at. Surely, without the help of FIIs and DIIs’ persistent buying, this milestone wouldn’t have been achieved. Overall, weaker USD, and stronger domestic fundamentals could pave the way for Rupee to appreciate towards 80.80 to 80.50 in the near term. On the flip side, 81.30-81.50 will act as a crucial resistance zone for the pair.”
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