The Indian rupee is expected to trade in a range-bound manner on Friday amid cautiousness in equity markets, strength in the US dollar. Analysts expect the USDINR pair to trade sideways and quote in the range of 80.50 and 81.5 today. Focus will be on US jobless claims, housing starts, building permits and Philadelphia Fed Manufacturing Index data. In the previous session, rupee depreciated against the US dollar, tracking the strength of the American currency in the overseas markets and a muted trend in domestic equities. At the interbank foreign exchange market, the local unit opened at 81.62 and settled at 81.63 against the greenback, registering a fall of 37 paise over its last close.
Sriram Iyer, Senior Research Analyst at Reliance Securities
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Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee continued to trade in a narrow range in the first half of the session but fell in the latter half as the dollar started to gain strength. The greenback gained momentum after as U.S. Treasury yields increased and investors eyed hawkish comments from Federal Reserve officials. On the other hand, pound fell as investors were left unimpressed by the UK government’s latest budget. UK finance minister announced tax increases and tighter public spending in an effort to restore the country’s economic reputation and cool inflation. Today, market participants will be keeping an eye on the existing home sales number from the US and better-than-estimate data could support the dollar at lower levels. We expect the USDINR(Spot) to trade sideways and quote in the range of 80.50 and 81.50.”
Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities
“If was a very fast and steep drop for the dollar on Thursday after the US CPI print came in lower than expected. The fall in the dollar index stopped after the FED speak continued and this created a lot of ambiguity around the next move by the FED with respect to the pace of rate hikes in the coming meeting. This has gotten the traders guessing whether the FED members will continue to hike the rate or will opt for a slower pace. These speculations have not only halted the dollar softening but also pushed it higher toward the 107 mark. On Thursday, USDINR pair started off on a negative note as the market mood was tilted towards the safe haven dollar. The rupee completely ignored the fall in oil prices and continued to move higher against the Dollar. Technically, we see some resistance come in near the 82.00 mark and the support is expected around the 81.30 zone.”
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Amit Pabari, MD, CR Forex Advisors
“USDINR’s price action suggests heavy bids on intraday dips and the pair is making higher highs and higher lows from the past four sessions. On one hand inflows of nearly $3.5 billion in the present month kept USDINR docile and on the other RBI’s buying with other participants coupled with the weakening Chinese Yuan is pushing the pair higher. Spikes near 81.80-82.00 can be expected while the support of 81.20 remains protected.”
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