The ongoing recovery in the global equity market, healthy correction in the US DXY along with a recovery in peer currencies like Euro and Pound supports a corrective view in the USDINR pair.
The Indian rupee is likely to trade mixed on Friday and the USDINR pair is expected to open again near 77.55 and trade between 77.30 to 77.80, according to analysts. Investors’ focus will be on US Core PCE, and RBI’s FX reserve data. In the previous session, the rupee declined against the greenback as firm crude prices and relentless foreign capital outflows dented investor sentiment. However, a rally in domestic equities and a weak American currency in the overseas market restricted the rupee’s fall. At the interbank foreign exchange market, the local unit opened at 77.54 against the US dollar and traded in a range of 77.65 – 77.52 before it finally settled at 77.57, down 2 paise over its previous close.
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Volatility for rupee remained low as continued to trade in narrow range of 77.20 and 77.80. Rupee retraced marginally after domestic equities gained in the latter half yesterday following short covering move. Market participants remained cautious ahead of the important preliminary GDP number that was released from the US. Data showed the economy could decline 1.5% as compared to estimates of a decline of 1.3%.”
“Dollar fell against its major crosses after the release of the data and now focus will be shifting to core PCE index number that will be released from the US. Expectation is that the number could come in higher and that could restrict major downfall for the greenback. Pound rose to the highest level in three weeks following the UK government’s latest measures to help alleviate a cost of living crisis seen supporting the economy in the short term. Extended retracement in the dollar is likely to provide further gains to the pound. We expect USDINR(Spot) to trade sideways and quote in the range of 77.05 and 77.80.”
Amit Pabari, MD, CR Forex Advisors
“It was another dull day for the USDINR pair. The ongoing recovery in the global equity market, healthy correction in the US DXY along with a recovery in peer currencies like Euro and Pound supports a corrective view in the USDINR pair. The focus turns to US Core PCE, and RBI’s FX reserve data. Today, the pair is expected to open again near 77.55 and is likely to be pegged between 77.30 to 77.80.”
“May month was surely not so good month as Nifty corrected by 6% and FIIs have withdrawn almost Rs. 39,000 crores from equities till date. In the bond market, US 10-year yield was seen testing a one-month low despite oil prices climbing about 3% to a two-month high on signs of tight supply and the EU’s plan for an embargo. The domestic 10-year yield is hovering near 7.30% against a falling US yield, thus helping long-term forward premiums to little recover from last week’s bottom. RBI’s action and exporter’s rush to lock higher long-term forwards have kept the pair under observation. Overall, as long as the pair is below 77.80 levels, one can expect a correction towards 77.10 and 76.80 levels.”
Tapish Pandey, Senior Research Analyst, SMC Global Securities
“The Indian rupee is likely to trade on a mixed note as the U.S. dollar trading lower, a day after minutes from the U.S. Federal Reserve’s May meeting indicated the central bank would remain flexible and might pause rate hikes later in the year. On the other side foreign participants still in selling mode for the last few months along with crude price has also resumed an upwards rally considering that we have mixed cues for the rupee for now.”
” The Dollar-Rupee is consolidating in a range of 77.47 to 77.88 levels after recording an all-time high of 77.88 on May 17, 2022; the current trading setup suggests USDINR near month future likely to remain in the same range for the coming session however any move beyond the above-mentioned range may decide further movement on the same direction in which range has broken. The overall trend for USDINR is bullish hence any dips towards lower levels same range may be utilized as a trading opportunity by keeping a stop loss below 77.25 levels.”
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