Indian Rupee opened marginally higher at 82.75 per dollar on Monday against the previous close of 82.86. The local unit is expected to depreciate on the back of a strong dollar and pessimistic global market sentiments amid aggressive monetary tightening policy of major central banks weighing on economic growth. Meanwhile, softening of crude oil prices may prevent sharp fall in domestic currency. “US$INR (December) is expected to trade in a range of 82.50-83.00,” said ICICIdirect. In the previous session, rupee depreciated by 0.14% on strong dollar, weak domestic markets. However, upbeat macroeconomic data from India prevented a sharp fall in the domestic unit.
Rupee (USDINR) Outlook
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
Rupee fell marginally after the Fed raised rates by 50bps and maintained an hawkish stance that led to strength in the dollar against its major crosses. Post the Fed, ECB and the BoE raised rates by 50bps as inflation remained sticky. On Friday, dollar gained strength despite a weaker preliminary manufacturing and services PMI number from the US. This week, market participants will be keeping an eye on the final GDP and core PCE index number from the US. A higher number is likely to extend gains for the dollar. We expect the USDINR(Spot) to trade sideways and quote in the range of 82.40 and 83.05.
Aditi Gupta, Economist, Bank of Baroda
The outlook for INR is contingent on a range of factors. On the global side, the movement in DXY will be one of the key defining factors for INR. Oil prices have seesawed, but have remained benign compared with the highs seen during the Russia-Ukraine war. Concerns have however remained on the domestic side. Trade and current account deficits have been increasing, raising concerns over their financing. Even FDI inflows have remained muted. Overall, we expect INR in the range of 82-83/$ in the near-term.
Amit Pabari, MD, CR Forex Avisors
Rupee opened marginally higher at 82.75 and it is likely to trade in a wide range of 82.30 to 83.00 today. ‘Sentiments and Positioning’ in the Rupee has mattered the most in recent days. Until RBI alters this and pushes Rupee towards its fair value, the divergence and deviation will keep on ruling over the same. But broadly, it will be hard for the USDINR pair to cross the 83.00 mark and thus we can expect a range of 82 to 83 over the next few days with a higher possibility of back to a normal level of 81.50-81.00 over the next 1 to 1.5 months.
Anand James – Chief Market Strategist at Geojit Financial Services
The 82.91-83 band continues to be an obstacle discouraging upside attempts. While we will nurture upside hopes while above 82.65, inability to float above the same will first push the trend in sideways mode, followed by plunges to 82.13.
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