The Indian Rupee is expected to trade steady on Thursday amid risk aversion in global markets and expectations of recovery in US Dollar. The domestic currency may track gains in regional peers as China’s stimulus plan bolsters the outlook for Asian economies. In the previous session, rupee consolidated in a narrow range and depreciated against the US dollar. At the interbank foreign exchange market, the local unit opened at 79.84 per dollar. It hovered in a range of 79.68 to 79.87 before finally settling at 79.85, down 2 paise over its previous close. Surge in crude oil prices and mixed to negative domestic equity markets restricted rupee’s movement.
“The Indian rupee may track gains in regional peers as China’s stimulus plan bolsters the outlook for Asian economies. Asian currencies strengthen against the US dollar in the morning Asian session amid risk-on sentiment driven by gains in regional equity markets. Implied opening from forwards suggests the spot USDINR may start trading around 79.75. On Wednesday, spot USDINR fell 5 paise to 79.82 following positive regional currency and exporter’s dollar selling. Technically, the pair is finding it difficult to cross the psychological level of 80 while on the downside 79.70 and 79.40 act as strong support areas.”
“Indian rupee appreciated by 0.11% today on weak US Dollar and FII inflows. However, surge in crude oil prices and mixed to negative domestic equity markets capped sharp gains. US Dollar declined on disappointing economic data from US. Services PMI declined unexpectedly to 44.1 in August from 47.3 in July while manufacturing PMI declined to 51.3 from 52.2. New home sales declined by 12.6% to 511,000 in July from 585,000 in June.”
“We expect Rupee to trade on negative note on risk aversion in global markets and expectations of recovery in US Dollar. Safe haven appeal on weak global markets and surge in US Treasury yields supported Dollar. However, FII inflows may support Rupee at lower levels. Market participants may also remain cautious ahead of Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium later this week. Markets may also take cues from durable goods orders and pending home sales data which is expected weaker than previous reading. USDINR spot price is expected to trade in a range of Rs 79.20 to Rs 80.50 in next couple of sessions.”
“USDINR spot closed 5 paise lower at 79.81, thanks to FPI inflows and corporate flows as well. However, with global situation remaining challenging, with US Dollar Index and USDCNH, both in uptrend, USDINR may continue to see dip buying. Bias remains upward till the US Fed chief’s Jackson meeting on Friday. Range can be 79.60 and 80.10 on spot.”
“Yesterday, the dollar gained in the first half of the session but weakened in the latter half after the durable goods number increased at a slower pace in July from the prior month, suggesting that business spending on equipment could struggle to rebound after contracting in the second quarter. Market participants remained cautious as they waited for a speech by the Federal Reserve chairman for fresh clues on how aggressive the central bank will be in its battle against inflation. The Fed Chairman speech in Jackson Hole will be scrutinized for any indication that an economic slowdown might alter the Fed’s strategy. Today, focus will be on the preliminary GDP data that will be released from the US and better-than-expected data could support the dollar at lower levels. We expect the USDINR(Spot) to trade sideways and quote in the range of 79.40 and 80.05.”
Courtesy- https://www.financialexpress.com/market/rupee-may-hold-steady-on-risk-aversion-in-markets-gains-in-regional-peers-usdinr-to-trade-with-positive-bias/2643252/