Rupee likely to rise on weaker dollar; USDINR pair could move in a straight line.

The weaker dollar is anticipated to support the Indian rupee on Friday. The expectation that the central bank may slow the rate hikes is causing the dollar to weaken. Additionally, market investors will continue to be cautious ahead of a crucial US employment report because it affects the Fed’s decision on policy. Meanwhile, a rise in the price of crude oil could stop the rupee’s strong advances. According to ICICIdirect, “USDINR (Dec) may trade in a range of 81.05-81.50.” The rupee concluded the previous session with a gain against the dollar as the less hawkish than anticipated remarks from US Federal Reserve Chair Jerome Powell encouraged the world markets. Comparatively to its previous closing of 81.42, the partially convertible rupee ended the day at 81.21 per dollar.

“Rupee extended its gains in yesterday’s session after Fed Chairman said that the rate of tightening in December is likely to slow down, but that additional hikes will still be required to control inflation. The minutes of a recent Fed meeting, which were recently made public, also revealed that officials might choose to raise rates by 50 basis points as opposed to 75 before. Major crosses kept picking up steam after the dollar experienced widespread weakness. The core PCE index increased 0.2% in October, which was slightly less than anticipated, and this weighed on the dollar yesterday.

However, a closely watched indicator of manufacturing activity reported its weakest reading in 2.5 years for November. The non-farm payrolls number that the US will release today will be the main topic of discussion. Economic data that exceeded expectations may keep the dollar supported at current levels. We anticipate that the USDINR(Spot) will fluctuate sideways and quote between 81.20 and 81.80.

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