Rupee expected to remain sideways amid falling crude prices and strong dollar

The Indian rupee is expected to remain sideways on Friday amid falling crude prices, risk aversion in global equity markets, and a strong dollar. The USDINR pair is having resistance at 79.90 and 80.15, while the support has shifted to 79.40 from 79.05, according to analysts. In the previous session, the rupee declined due to strong demand for the U.S. dollar from oil companies, while markets braced for a big rate hike from the U.S. Federal Reserve next week.

“The rupee maintained its narrow range and volatility remained modest, despite the fact that inflation data from the US and the UK exceeded expectations. Following news that U.S. retail sales unexpectedly rose in August, the dollar was marginally higher. The high Japanese trade imbalance for August put pressure on the yen. Increased import expenses as a result of the approximately 20% decline in the value of the yen over the previous six months exacerbated already high expenditures for energy and raw materials

“A weak handover from abroad could cause the value of the Indian Rupee to decline. Risk aversion has been observed overnight as a result of a variety of US economic data that supported the stance of hawkish monetary policy. Currently, US Swaps traders are factoring in a 75 basis-point increase when the Fed meets the following week. Other regional currencies may suffer from the Chinese yuan’s depreciation, which crosses the 7.” said, Dilip Parmar, Research Analyst, HDFC Securities

“The US consumer and labor markets remain strong, and inflation is supporting the Fed’s aggressive rate raise decision at its upcoming policy meeting on September 21. As of today, markets have fully factored in the possibility of an increase of 0.75 basis points (bps), while 30% anticipate an increase of one full percentage point. This has supported the strength of the US currency and driven US 10Y rates to a 52-week high yesterday. Here, the rupee’s recent rapid advance near 79.00 levels has been promptly wiped away, allowing it to trade once more back to levels close to 79.80.”said, Amit Pabari, MD, CR Forex Advisors

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