The Indian rupee is likely to appreciate on Monday amid a weak dollar and rise in risk appetite in domestic markets. Additionally, persistent FII inflows may support the rupee. Meanwhile, sharp gains may be prevented on a rise in crude oil prices after Opec+ agreed to stick to their October plan to cut output by 2 million bpd from November through 2023. “US$INR (December) may trade in a range of 81.15-81.60,” said ICICIdirect. The local unit ended up 0.45% last week at 81.31 per dollar but underperformed its Asian peers due to strong demand for the greenback from corporates. In the currency markets, a 35-bps rate increase by the RBI has largely been priced in, according to analysts.
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“Indian Rupee traded on a flat note. Weak US Dollar index supported rupee. However, weak domestic markets, surge in crude oil and FII outflows capped sharp gains. US Dollar declined as US ISM manufacturing PMI slipped into contraction and positive riskier currencies such as Euro and Pound. We expect Rupee to trade with a slight negative bias on risk aversion in global markets and fresh outflows by FIIs. However, softness in the greenback may support Rupee at lower levels. Markets may also take cues from US non-farm payroll data today evening, wherein it is expected to show slower pace of hiring. USDINR spot price is expected to trade in a range of Rs 80.80 to Rs 82.”
Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities
“The downbeat data coming from the US kept the US dollar under pressure. On the USDINR front, the 81.00 level of the futures seems to be intact. As long as the pair remains above the 81.00 level we might see a broader consolidation between 81.00-82.00.”
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee, on Friday, fell marginally but continued to consolidate in a narrow range ahead of the important non farm payrolls number that was released from the US. Data showed the US economy added 263k jobs in November as compared to 284k added in the previous month. The unemployment rate was unchanged at 3.7% in September, in line with market expectations. On the domestic front, focus will be on the RBI policy statement. Expectation is that the central bank could raise rates by another 35bps. But importantly market will keep an eye on what stance the RBI could adopt to going ahead will determine the trend for the currency. Today, volatility for major crosses could remain low as no major economic data is expected to be released from the US. We expect the USDINR(Spot) to trade sideways and quote in the range of 81.20 and 81.80.”
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Amit Pabai, MD, CR Forex Advisors
“Rupee likely to be pegged between 81.00 and 81.60. In the near term, appreciating factors for the Rupee could be a weakness in USD/yields, a fall in oil prices, appreciation in peer currencies like Yuan/Yen, FII’s inflows, and a stable domestic outlook. Against this, the odds could go in favor of depreciation if the Ukraine-Russia war escalates or any unknown theme takes birth. Overall, we continue to set the same view for the week. The upside in the pair is expected to be capped near 81.80-82.00 levels, whereas, the bearish momentum could help the pair to break 81 and move towards 80.80 and 80.50 levels in the near term.”
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