Rupee likely to remain steady on retreat in dollar, stable crude prices; USDINR to trade in this range

Rupee is expected to remain steady on Tuesday amid, retreat in the US dollar, a rise in risk sentiments in equity markets, and stable crude prices. In the previous session. rupee depreciated by 11 paise to close at 82.30 against the US dollar as risk-off sentiment among investors and sustained foreign capital outflows weighed on the local unit. However, a rally in the domestic equities and a weak greenback overseas restricted the rupee’s fall. Rupee has been mostly rangebound recently as the RBI likely sold dollars, according to forex analysts who believe that RBI’s continuous presence has been a big support to the rupee as it has been in the market most days since last Monday when the rupee hit a record low of 82.6825.

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“Rupee continued to consolidate in a narrow range and volatility remained low as no major economic data was expected to be released from the US. Yesterday, risk on sentiment got a boost after Britain’s new finance ministerscrapped Prime Minister Liz Truss’s proposed tax cuts and reined in her energy subsidies. Long-dated Treasury yields turned higher late in a choppy session for the bond market, even as investor sentiment eased in the wake of the British policy about-face.”

“Dollar dipped in yesterday’s session against its major crosses. Last week, one of the Fed members mentioned that the Federal Reserve’s rapid interest rate increases have contributed to the strength of the dollar, but that may ease once the U.S. central bank reaches the point of pausing the hikes. Today, the focus will be on the industrial production number from the US and better-than-expected data could support the dollar. We expect the USDINR(Spot) to trade with a positive bias and quote in the range of 82.10 and 82.60.”

Praveen Singh – AVP, Fundamental currencies and Commodities analyst, Sharekhan by BNP Paribas

“Currently, USDINR pair is trading with a gain of 5 paise as the Rs 82 level continues to serve as a strong support for the pair. The USD-INR pair may slide to 81.50 level in near-term on markets embracing risk, however overall outlook for the domestic currency remains bearish. India’s WPI inflation in September, though edged lower to 10.70% (forecast 11.50%) from 12.41% in August, it remained in double digits for 18th month in a row. USDINR near 83 level is seeing supply. In near-term, USDINR is expected to trade between Rs 81.50 and Rs 83.”

Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives, Kotak Securities

“USDINR spot closed flat 82.35. It has been 7th straight trading days, spot has closed between 82.30/40 levels. This indicates possibility or a correction and retest of 82.00 ahead in the coming days. However, FPI outflows should keep the downside limited. We expect a range of 82.00 and 82.60 on spot.”

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Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors

“As dollar index falls to 112.15, rupee to open around 82.21 today with oil hovering around $92 per barrel. Reversal of tax cuts by UK Finance Secretary took the dollar index lower as risk on sentiments continued for a second day in reckoning. US retail sales came flat yesterday while a data from RBI showed RBI sold net $4.2 billion in August-22 while it had sold $19 billion in July-22. The net outstanding Forward purchases were down slightly from $22 billion to $20 billion. The data of September and October would be interesting to watch as RBI has sold forward in these two months.”

“Rupee to remain in a range of 82.00 to 82.50 as RBI sits on 82.40 selling dollars and not allowing a move beyond this level since rupee attained a level of 82.68. Exporters to wait for a breach of 82 on the downside or 82.45 on the upside before taking the next call. Importers to keep hedging the dips as oil, dolkar index, hike in interest rates and global uncertainity still remain a cause of concern.”

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