The Indian rupee opened marginally lower on Friday at 82.77, down 1 paise from the previous close of 82.76. The local unit is expected to depreciate further mainly on the back of a firm dollar, rise in crude oil prices, and risk aversion in global markets. Market sentiments are pessimistic as investors fear that solid economic data from the US may keep the US Fed hawkish for longer. “Additionally, market participants will remain cautious ahead of inflation and personal spending data from the US to get fresh directional cues. US$INR (December) is expected to trade in a range of 82.60-83.05,” said ICICIdirect.
Rupee may hit a record low of 85 to a dollar next year as the greenback firms up after a recent round of correction, according to Capital Economics. “The dollar has stabilised over the past month after its sharp fall in November, and we continue to think that a slowing global economy and worsening risk sentiment will lead to another (possibly final) leg-up in the dollar over the first half of 2023,” Jonas Goltermann, Senior Markets Economist, said in a note. The dollar will strengthen further against most other currencies over the coming quarters as global growth slows, and risk appetite remains fragile, he added.
Yesterday, final GDP number from the US was released and data showed the economy grew at an unexpectedly strong 3.2% annual pace from July through September. “Today, focus will be on the core PCE index and durable goods number from the US. Better-than-expected economic data could continue to extend gains for the dollar. We expect the USDINR(Spot) to trade sideways and quote in the range of 82.70 and 83.20,” he added.
Rupee daily momentum likely to squeeze down
“Rupee like to trade near 82.85 and as we are heading towards year-end, the daily momentum is likely to further squeeze down. Its diverging path with weaker USD or stronger EM currencies could not last long and thus we could see a reversal in the same. We hope, RBI doesn’t need to work over the year-end to curb volatility and rates. Overall, we expect the USDINR pair to top out near the 82.75-83.00 zone and target 82-81.50 for the near term,” said Amit Pabari, MD, CR Forex Advisors.
USDINR to remain range-bound in near term
“USDINR spot closed 5 paise lower at 82.76, in a lackluster trading. Due to year end, volumes are low and hence we expect the pair to continue to stay rangebound between 82.50 and 83.00 over the near term,” said Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities.
“Moves were extremely lacklustre yesterday, retaining only a mild positive bias. We are still close to the 82.88 marker, a break of which could open room for 83.25. However, oscillators are not primed for a directional upside and a pull back again inside the 82.88 –82.6 band is also possible after the initial upside break, which may render the trend neutral,” said Anand James – Chief Market Strategist at Geojit Financial Services.
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