The Indian rupee is expected to slump against the dollar as surging crude oil prices cloud the nation’s growth, inflation, and trade deficit outlook. Oil surges above $100 a barrel likely to drive dollar rupee above 76 marks.
The Indian rupee is expected to depreciate against the US dollar as surging crude oil prices cloud India’s growth, inflation, and trade deficit outlook. Crude oil surges above $100 per barrel is likely to drive dollar rupee above 76 mark. Continuous FII outflows and strong dollar may make the domestic currency weaker in near future. In the previous session, rupee slipped marginally against the US dollar on Monday due to rising crude oil prices amid deepening tensions between Russia and Ukraine. Sustained foreign fund outflows also weighed on investor sentiment. At the interbank foreign exchange market, the local unit opened weak at 75.73 against the US dollar. However, it recovered most of its losses to settle at 75.35, down 2 paise from the previous close.
Rupee expected to depreciate today due to uptick in dollar: ICICI Direct
“The dollar index surged 0.72% on Tuesday amid European Union sanctions against Russia. Further, pessimistic sentiments in the global markets and better-than-expected ISM manufacturing data from the US lifted the dollar. However, decline in US 10 year treasury yields capped upside gains in the dollar. Rupee March futures appreciated by 0.04% on Monday despite stronger dollar and elevated crude oil prices. The rupee is expected to depreciate today due to uptick in dollar. Further, consistent FII withdrawal from domestic markets and risk aversion in the global markets are expected to weigh on the rupee. Moreover, investors will remain cautious ahead of Fed Chair Powell’s testimony and major economic data from US. US$INR (March) is expected to rise towards 76.0 for the day.”
Tapish Pandey, Research Analyst, SMC Global Securities
“USDINR is trading on firm note after taking support near 73.87-73.88 levels since beginning of Jan 2022 and well trading above its major moving averages indicating bullish trend for now. Now Dollar is facing immediate resistance near 76.15-76.20 levels sustain above which may head higher towards near major resistance levels 76.75-76.80 while on lower side support is seen around 75.20-75.25 levels of major moving averages. For now if dollar not able to sustain above said immediate resistance levels (76.15-76.20) may witness sideways trade for coming session in range of 75.20-76.20 levels if above resistance positive momentum likely to continue.”
Kshitij Purohit, Lead Commodity & Currency at CapitalVia Global Research
“Technically, despite a recent drop from the intraday top during the early hours of the Indian trading session on Monday, the USD/INR trades around 75.70. As a result, the Indian rupee (INR) pair has remained at its best levels since late December, while also remaining within a megaphone chart pattern that suggests the gradual positive momentum will broaden further. Even if the price falls below 75.05, bears will be challenged by the 75.00 level and the mentioned megaphone’s support line near 74.50. The 200-DMA level around 74.40 also serves as a key support. Alternatively, the recent high of 75.90 and the round figure of 76.00 may limit short-term USD/INR upside gains ahead of the megaphone’s resistance line, which is expected to be around 76.10 by press time. If the USD/INR bulls manage to break through the 76.10 barrier, the late 2021 peak near 76.50 will capture the market’s attention.”
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee traded with high volatility on Monday as it opened sharply lower and consolidated in higher ranges but rose in the latter half on speculation that talks between the two nations could start to recede. The Russian negotiator said that Russia is interested in coming to an agreement that is in the interests of both sides at talks with Ukraine. But in the last couple of days, the rupee has significantly come under pressure as Russia’s invasion into Ukraine intensified and oil prices surged. The invasion has resulted in Western sanctions that include cutting off some Russian banks from the SWIFT financial network and limiting Moscow’s ability to deploy its $630 billion of foreign reserves.”
“The Russian Rouble sharply fell against the US dollar and prompted the Russian central bank to more than double interest rates to 20% and adopt a range of other urgent measures. On the domestic front, the currency is also weighed down by a sharp surge in global crude oil prices. Earlier this week, data showed India’s GDP economy grew 5.4% in the October-December quarter and is likely to grow at 8.9% in 2021-22. For the third quarter of the current fiscal, the GDP growth of 5.4% compares to 8.5% growth in the second quarter. Volatility for most currencies and commodities is expected to remain elevated unless and until the uncertainty doesn’t settle down. We expect the USDINR(Spot) to trade sideways with a positive bias and quote in the range of 75.20 and 76.20.”
