The Indian rupee is likely to depreciate amid strong dollar, risk aversion in global markets. Asian currencies are taking a hit from dollar’s strength. USDINR pair is expected to consolidate in the range of 80.10 to 79.60 in the near term, according to analysts. In the previous session, rupee declined against the US dollar amid a lacklustre trend in domestic equities. At the interbank foreign exchange market, the local opened at 79.80, and it settled at 79.80 against the greenback, down 2 paise over its previous close. The finance ministry will hold a meeting on Wednesday with all stakeholders, including banks and officials of external affairs and commerce ministries, to discuss ways to promote cross-border trade in rupee instead of US dollar.
Dilip Parmar, Analyst, HDFC Securities
“The Indian rupee is expected to open slightly lower following overnight strength in the greenback and risk-averse moods. The forward markets indicate spot USDINR could open around 79.90 and may add gains following regional peers. On Tuesday, spot USDINR ended with a mere 1 paise loss to 79.84. The pair is expected to consolidate in the range of 80.10 to 79.60 in the short term but the bias/ trend remains bullish as long as it trades above 78.70.”
“Developed economies are taking a hit from the dollar’s appreciation to multi-decade highs in ways that were once more familiar to their emerging market peers. The Fed’s trade-weighted dollar index versus advanced economies has soared 10% this year to the strongest since 2002, while the emerging-markets measure is up a more modest 3.7% and remains well below its peak from the 2020 pandemic.”
Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities
“USDINR spot closed flat at 79.84 due to lack of fresh triggers. Corporate inflows and suspected intervention from RBI kept USDINR capped but at the same time, weakness in Chinese currency did not allow Rupee to appreciate. Over the near term we expect a rangebound price action in USDINR. Range could be 79.50 and 80.10 on spot.”
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee continued to trade in a narrow range despite volatility in major crosses and also as the dollar rose to its highest level in 20-years. The dollar rose after a report on the U.S. services industry in August reinforced the view that the United States was not in recession. Non-manufacturing PMI edged up to a reading of 56.9 from 56.7 in July, the second straight monthly increase after three months of declines.”
“On the other hand, pound fell even after Britain’s incoming Prime Minister Liz Truss is considering a freeze on household energy bills to try to avert a winter cost-of-living crisis for millions of households. European Union ministers will meet on Friday to discuss urgent measures to respond to a surge in gas and power prices that is hammering European industry and hiking household bills, after Russia curbed gas deliveries to the bloc. Today, volatility for the dollar could remain low as no major economic data is expected to be released from the US. We expect the USDINR(Spot) to trade sideways and quote in the range of 79.70 and 80.05.”
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