Due to the strong dollar and high crude prices, the rupee will decline; USDINR will trade in this range.

On Monday, the Indian rupee is anticipated to weaken due to a strong dollar and an increase in crude oil prices. The dollar is trading close to its five-week high as expectations for continued Fed policy tightening rise in the wake of the Labor Department’s revision of the CPI data upward for the previous three months.

Furthermore, surveys conducted by the University of Michigan indicated a 4.2% inflation estimate for the coming year, which was higher than the actual figure from January. Investors are awaiting Indian CPI data, which is anticipated to remain below RBI’s comfort level for a third straight month. According to ICICIdirect, “The US$INR is projected to trade towards the level of 82.85 for the day.”

“Even as the dollar rose from its most recent lows, the rupee only slightly strengthened but continued to move in a constrained range. The inflation rate will be the main topic of discussion today, and it is anticipated that it will increase by 5.9% as opposed to 5.72% in the previous month.

After the RBI raised concerns about core inflation, bond yields increased, leaving the door open for another increase. The US will announce its inflation data tomorrow, which is likely to cause currency volatility. The USDINR (Spot) is anticipated to trade sideways and quote between 82.40 and 82.90, according to Gaurang Somaiya, a forex and bullion analyst with Motilal Oswal Financial.

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