Rupee likely to depreciate further on strong dollar, weak Asian peers; may slip to 82 per USD
The Indian Rupee is expected to depreciate further on strong dollar, weak Asian peers, and risk aversion in markets. Rupee is likely to open at 81.40, and trade in a range of 81.20 to 81.70 for the day, according to forex analysts. The local unit may slip to 82 per dollar soon, they added. In the previous session, rupee tumbled to a record low of 81.66 against the US dollar as various risky assets continued to be pounded by concerns of a looming recession in developed economies that have prompted a worldwide hardening of interest rates. The US dollar has gained against several currencies, including the rupee. An indication of its global strength is being reflected in the Dollar Index which vaulted to a new 20-year high of 114.53.
Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors
Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives, Kotak Securities
“USDINR spot closed at a fresh all-time high at 81.62, up 64 paise, after touching a high of 81.65. Massive rally in the US Dollar Index and collapse in the British Pound triggered this up move. Additionally sharp rise in US and UK bond yields and sell off in global equities contributed to the bearish sentiments in EM currencies. Over the rest of the week, we could see massive two way volatility across currency pairs, including the USDINR, as central bank fight it out with speculators. As we can expect a range of 80.70 and 82.10 on USDINR.”
Anuj Choudhary – Research Analyst, Sharekhan by BNP Paribas
“Rupee depreciated by 0.59% on Monday and touched a record low of 81.6625 on strong Dollar and weak domestic markets. Dollar surged to fresh 20-year high of 114.527 amid weak global equities and sharp fall in riskier currencies such as Pound. Pound fell to record low levels of around 1.035 per US Dollar levels after UK’s Finance Minister Kwasi Kwarteng announced tax cuts and increased borrowing which spooked markets. Markets tanked on worries over UK’s economic growth.”
“We expect Rupee to trade on a negative note as deteriorating global risk sentiments may put downside pressure on Rupee. Weak global markets may lead of safe haven flows towards US Dollar. However, sharp fall in crude oil prices may prevent sharp downside in Rupee. Investors may remain cautious ahead of RBI’s monetary policy meeting towards the end of the month. RBI is expected to rise interest rates by 50 bps. USDINR spot price is expected to trade in a range of Rs 80.50 to Rs 82.50 in next couple of sessions.”
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