On Tuesday, the Indian rupee depreciated against the dollar, opening at 81.59 against the previous close of 81.50. The local currency is probably going to lose value today due to a strong dollar and further FII withdrawals. Investors will also pay special attention to important US macroeconomic data, such as the CB consumer confidence index, which is predicted to rise from 108.3 to 109.
A surge in risk appetite on international markets may, in the meanwhile, prevent a dramatic decline in the rupee, as the Fed is expected to scale back its rate increase for a second consecutive meeting. According to ICICIdirect, the US dollar is likely to break over the important resistance level of 81.72 and begin trading in the direction of 81.85.
“Rupee volatility has been modest over the past several sessions as market participants remained cautious prior to the release of the Union budget. Investors will be watching for the budget deficit target release, which will be crucial for the rupee. In addition to the budgetary target, the government may also set disinvestment goals that may have an impact on the rupee.
Data on consumer sentiment will be the main topic of discussion today after the dollar edged up against its key crosses yesterday. The dollar could continue to strengthen if the number is higher. According to Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, the USDINR (Spot) is likely to move sideways and quote between 81.10 and 81.60.