The Indian rupee is expected to depreciate on Wednesday on the back of firm dollar and weak global market sentiments. “Market sentiments are hurt as elevated inflation in US kept aggressive monetary tightening bets alive. Additionally, disappointing economic data from India and surge in crude oil prices will hurt the rupee. US$INR (April) is expected to trade in a range of 76.00-76.45,” said ICICI Direct. The local unit fell 23 paise to close at 76.14 (provisional) against the US dollar on Tuesday, tracking a strong American currency in the overseas market and a negative trend in domestic equities.
Heena Naik, Research Analyst – Currency, Angel One
“On 12th April, USDINR made a gap opening at 76.02 levels from its previous day’s closing of 75.95 levels. Thereafter it traded in a range between 75.98 to 76.18 levels with a bias towards upside on the back of suspected dollar buying by oil companies. In today’s session, markets shall react to the release of U.S. consumer prices data that rose in March’22 by the most since late 1981. This has boosted expectations that the US Federal Reserve will raise interest rates by half a point next month. However, since the currency markets shall remain shut on Thursday and Friday, many investors may not prefer taking any risky positions considering the geo-political tension still persists. USDINR shall move in the range between 75.80 to 76.40 levels.”
Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities
“USDINR inched higher all day on Tuesday, thanks to speculative demand stemming from weakness in the equity markets, rise in the US bond yields and the strength in the US Dollar Index. Market was betting on US Dollar ahead of US’ CPI inflation data. In the US, CPI inflation for the month of March surged to 8.5%, highest since 1981. Core inflation rose 6.5%, but at a slightly slower pace than February. If oil and other major commodities do not scale the peaks of early March, inflation will begin to peak as well. This could become an excuse for near-term profit taking in the US Dollar. A kind of ‘buy the rumour and sell the news’ trade. USDINR is trading near 76.00 on spot, down 10 paise from onshore close. Today, we could see more rangebound price action. Hence, selling options remains the preferred trade.”
Rahul Kalantri, VP Commodities, Mehta Equities
“USDINR 27April futures contract breached its major resistance level of 76.06 again on a daily closing basis. On the daily technical chart, the pair is trading above its resistance level of 75.85. As per the daily technical chart, we observed that the pair is sustaining above 75.85 levels and technical chart is showing positive momentum. Looking at the technical set-up, if a pair continues to sustain above 76.06; could show further strength towards 76.40-76.55 in the upcoming sessions.”
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee ended lower against dollar amidst higher inflationary expectations. The US Dollar surged higher in yesterday’s session supported by high US. Yields. US consumer price growth surpassed 8% in March, its fastest pace since 1981 following surge in the cost of energy and food, maintaining pressure on the Fed to take on much aggressive pace w.r.t the inflation rate to tackle inflation. India’s retail inflation rate accelerated to 6.95% in March from a year earlier, the fastest pace in 17 months and quickened for the sixth straight month beating the expectation of 6.35%.”
“Last week, India’s MPC said it will be withdrawing accommodation. The RBI remarked that anchoring inflation took priority over growth, hence further updates from the same on the back of such higher numbers will be important to watch for. Adding more worries among traders, WTO projected that Russia’s war in Ukraine could almost halve world trade growth this year and drag down global GDP growth too. Market participants for today will keep an eye on the U.S. PPI and U.K. CPI. Focus will also be on the ECB policy meet, scheduled today. We expect the momentum for the USDINR would continue to quote in the range of 75.95 and 76.25.”
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