Rupee declines on strong dollar, risk aversion in markets; USDINR pair expected to move in this range

The Indian rupee lost 66 paise to 81.57 against the U.S. dollar in early trade, following the American dollar’s rise in the international market and a flat domestic equity market. On the strength of encouraging domestic macroeconomic data and falling crude oil prices, the rupee strengthened versus the U.S.dollar in the previous session. The local unit was also bolstered by consistent foreign fund inflows. The native currency rose 14 paise from its previous close to reaching 81.14 at the interbank foreign exchange from its opening price of 81.18 versus the dollar.

Due to a decline in the U.S. Dollar index and a rise in stock prices, the USDINR spot price ended the day 16 paise lower at 81.10. The G-20 meeting’s risk-on atmosphere, expectations for a better geopolitical environment, and better-than-anticipated economic statistics from Europe all contributed to the strengthening of the rupee. More decline in the USDINR is possible this week. Exporters may push the USDINR up to 80.50 or 60 levels at the moment. A range of 80.50 and 81.50 is anticipated.

Director of CR Forex Advisors, Amit Pabari said, “RBI has been buying USD, which will keep domestic demand for the currency steady and probably maintain the protection of the 80.80 level near-term bottom. Any rebound towards the 81.50–82.00 levels can be viewed as a selling opportunity because the overall trend in the DXY appears to have altered after a major 109.50 level collapse. Furthermore, the nation received around $3 billion from the return on foreign investment. As a result, it is obvious that the current situation has changed from one of “buy on dips to sell on the rise,” albeit this could change periodically given the volatility.

Leave a Reply

Your email address will not be published. Required fields are marked *