The Indian rupee is likely to appreciate on Friday on the back of weakness in the US dollar and optimistic global market sentiments. Further, softening crude oil prices may be supportive for the domestic currency as it will reduce Import bills. In the meantime, investors will remain cautious ahead of the key economic data from US as it could change the expectations around the terminal Fed fund rates which currently lingers around 5%. “Additionally, investors fear that rising interest rates will hamper global economic growth. US$INR (December) may trade in a range of 82.15-82.60,” said ICICIDirect. In the previous session, The local unit consolidated in a narrow range and settled 3 paise higher at 82.44 against the greenback, supported by positive domestic equities.
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“The Rupee is expected to open around 82.20 levels, tracking stronger EM currencies on the back of the improved risk-on sentiment. Next week India’s CPI data will be released, and it will be important for assessing whether the RBI calls the peak for rates in this tightening cycle. We expect that inflation would be falling as international crude oil prices are well below the RBI’s benchmark of 100$ per barrel, which could add gains in the local currency. For now, we expect the Rupee to regain ground and expected to appreciate back towards 81.50-81.20 over the next month and 80.50 over two months.”
Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities
“USDINR spot closed 5 paise Lower at 82.43, down 5 paise, in a day of listless trading. With no major triggers ahead of the Fed meeting next week, we expect USDINR to remain range bound between 82.00 and 82.75, with a downward bias.”
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Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Reaction of the RBI policy on the currency and money market was muted. The focus will now be shifting to the FOMC policy statement, expectation is that the central bank could raise rates by 50bps and maintain a less hawkish stance. This meeting will be important as it will give out projections and the dot plot and that could trigger volatility for the currency. Today, from the US market participants will be keeping an eye on the PPI and prelim consumer sentiment number, better-than-expected economic data could extend gains for the dollar. We expect the USDINR(Spot) to trade sideways and quote in the range of 82.20 and 82.80.”
