Rupee likely to appreciate amid retreat in dollar, declining crude prices and rise in risk in equity markets

The Indian Rupee is expected to appreciate on Monday amid rise in risk in equity markets, declining oil prices, and fresh foreign fund inflows. In the previous session, rupee declined against the US dollar on Friday as a stronger greenback in the overseas markets weighed on the local unit. However, a positive trend in domestic equities and fresh foreign fund inflows capped the rupee’s loss. At the interbank foreign exchange market, the local currency opened weak at 82.39, and settled at 82.48 against the American currency, down 15 paise from its previous close. The domestic currency has been hitting new lows, week after week. From holding on to 74 against the US dollar in January 2022 to dropping to 83 in October, the local unit has seen a double-digit fall against the greenback in percentage terms in just 10 months.

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“Rupee consolidated in a narrow range but rose marginally as the dollar witnessed profit booking at higher levels. In the last couple of sessions, the dollar fell following weak economic data from the US. Weakening economic data firmed views that the Federal Reserve will slow the pace of its rate hiking cycle. This week is going to be important in terms of the central bank policy meeting and the number of economic numbers that will be released from the major economies.”

“On the domestic front, an additional RBI policy meeting is scheduled on 3rd November a day after the Federal Reserve will release its policy statement on 2nd November. Apart from the RBI and the Federal Reserve market participants will also focus on the Bank of England who is again expected to raise rates. Today, focus will be on the preliminary CPI number that will be released from the Eurozone. We expect the USDINR(Spot) to trade sideways with a negative bias and quote in the range of 82.05 and 82.50.”

Anuj Choudhary – Research Analyst, Sharekhan by BNP Paribas

“Rupee consolidated in a narrow range today and is currently trading marginally lower by 0.03%. Strong dollar index put downside pressure on rupee. However, positive domestic equities and weak crude oil prices cushioned the downside. FII inflows also supported Rupee at lower levels. We expect rupee to trade with a negative bias amid weak global markets and strong dollar. Expectations of a 75 bps rate hike by US Fed in its November FOMC meeting may also weigh on rupee. However, FII inflows may support rupee at lower levels. Investors may remain cautious ahead of core PCE price index which is expected to increase but at a slower pace than the previous month. We expect USDINR spot price to trade in the range of 81.80 and 83.30 in next couple of sessions.”

Raj Deepak Singh, Analyst – Currency, F&O, and Commodities, ICICIdirect

“On a weekly chart, the USDINR pair is trading at 82.47, above the support level of 81.97, which suggests a positive outlook. On the daily chart, it has started making higher lows, which indicates upward trend for the pair. This week, we anticipate USDINR to rise till 83.00 levels. For Monday Rupee may depreciateamid strong dollar and pessimistic global market sentiments. Further, surge in crude oil prices and persistent FII outflows will hurt rupee. USDINR (Nov) is likely to trade towards the level of 82.85.”

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Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors

“The dollar index was at 110.92 while US 10-year yields was at 4.04% and oil at $ 93.23 per barrel. Most Asian currencies were also down against the dollar. The Dow Jones on Friday rose by 828 points and accordingly SGX Nifty is up by 200 points. Rupee likely to open at 82.35 levels and remain in a range of 82.00 to 82.60 for the day as markets await for FOMC decision on 2nd November. Exporters in the near term may sell the rise towards 82.50 and above while importers may buy the dips towards 82.00 for hedging their receivables and payables respectively.”

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