Rupee weakens due to a strong dollar and rising oil prices; use this range to place trades in the USDINR pair

On Thursday, the Indian rupee depreciated by 10 paise to open at 82.59 against the dollar, down from the previous close of 82.49. Due to the strengthening dollar and growing price of crude oil, the local currency is anticipated to decline today. Additionally, a consistent FII exodus from domestic equity markets could put pressure on the rupee. Investors will be eagerly monitoring US initial unemployment claims data, which is anticipated to increase from 183,000 to 190,000.

According to ICICI direct, the US$INR is projected to trade in the vicinity of 82.80 levels. Even after the RBI increased interest rates by 25 basis points in the previous session and maintained its policy of withdrawing its accommodative stance, rupee volatility remained minimal.

Shaktikanta Das, the governor of the RBI, said on Wednesday that core inflation may continue to be sticky. In contrast to the earlier forecast of 6.7%, retail inflation is now anticipated to be 6.5% in FY23. The earlier projection of 6.8% was revised to 7% GDP for FY23. The rupee showed no significant reaction and traded in a constrained range. “With no significant economic data scheduled to be released from the US today, volatility may remain low. According to Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, “We anticipate the and quote to be in the area of 82.40 and 82.90.”

Strong FDI inflows, a hawkish RBI, and favorable real rates are anticipated to support the rupee’s shift in the direction of appreciation. So, in the near future, we anticipate that the pair will move between 82-81.50. On the other hand, the 82.75-83.00 range would face fierce resistance, and the RBI may increase the supply of dollars to restrain the advance, according to Amit Pabari, MD of CR Forex Advisors.

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