The Indian Rupee is likely to trade in a rangebound manner on Wednesday amid mixed ideas. The range for the day as RBI ensures to keep the rupee within 80 levels is 79.70 to 80.00, according to forex analysts. Any trigger may lead to a breakout and set a target of 80.50-81.00 levels.
In the previous session, the rupee decreased against the U.S. dollar, tracking a strong American currency in the overseas market and rising crude oil prices. At the interbank foreign exchange market, the local unit opened at 79.85 and saw an intra-day high of 79.81 and a low of 79.90 against the greenback before it finally ended at 79.88, down 4 paise over its previous close.
Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities said, “USDINR spot closed flat, as RBI involvement and FPI flows kept the dollar demand well filled. The rupee has been outstanding against a basket of emerging market and developed market currencies, since mid-August. The fall in oil prices and FPI flows have helped. However, upside risk remains intact as U.S. Dollar Index and USDCNY remain in an uptrend. We expect a range of 79.60 and 80.30 on spot over the near term.”
Amit Pabari, MD, CR Forex Advisors said, “Today, the Indian Rupee is expected to open on a calmer note near 79.85 and is likely to trade in a range of 79.60 to 80.10. The silent days for the Rupee signal upcoming higher irregularity. Factors are still gloomy for Rupee, but a halt in FPIs selling and RBI’s intolerance of irregularity and 80 levels helped it to remain on a mixed note.”
Moving forward, a recovery in oil prices on possible OPEC+ supply tightening, and a rise in U.S. yields ahead of the Jackson Hole symposium may not allow it to remain an outlier. In nutshell, as long as the pair is below the All-Time-High of 80.05, it is expected to trade on a calmer note with a potential range of 79.30 to 80.05. Any single trigger will be enough for it to give a breakout and to set a target of 80.50-81.00 levels, he added.
