The Indian rupee is likely open higher on Thursday amid strong dollar, recovery in Asian currencies and lower crude oil prices. USDINR is expected to break the hurdle of 78.25 to move towards the level of 78.00, according to ICICIDirect. Investors will closely watch US initial jobless claims data as it is expected to fall from 229,000 to 227,000. The rupee declined by 27 paise to a record low against the US dollar in the previous session due to unabated FII outflows and losses in domestic equities. A stronger greenback overseas also weighed on the rupee sentiment. At the interbank foreign exchange market, the local unit opened flat at 78.13 against the greenback and it ended the day at a record low of 78.40, down 27 paise over its previous close.
Dilip Parmar, Research Analyst, HDFC Securities
“The Indian rupee could open slightly higher following a recovery in Asian currencies and lower crude oil prices. On Wednesday, WTI crude oil futures fell below $102 a barrel, which represents a 22% drop over the past two weeks and meeting the technical definition of a bear market. The fall in commodity prices could ease the inflation worries but fear of recession bodes well for the haven currency dollar.
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
“Rupee fell to fresh all-time lows as the dollar continued to strengthen against its major crosses ahead of the important Fed Chairman testimony that was scheduled yesterday. US treasury yields fell on fears the U.S. economy could slide into recession after Federal Reserve Chair Jerome Powell said higher rates are painful but are the means the U.S. central bank has to slow inflation. Today, focus will be on the preliminary manufacturing and services PMI number that will be released from the US, UK and the Euro zone. We expect the USDINR(Spot) to trade with a positive bias and quote in the range of 77.70 and 78.50.”
Sugandha Sachdeva, Vice President – Commodity and Currency Research , Religare Broking
“The Indian rupee has slumped to a new record low against the US dollar after consolidating around the 78 mark for a while, amid the unabated outflows witnessed from the domestic equities and renewed strength in the greenback. The sentiments have taken a hit amid deteriorating global growth prospects and as the central banks look to act aggressively in their battle against inflationary forces.”
“Investors are seen flocking on to the safety of the US dollar as consumer price inflation in the UK has ticked to a new 40-year high of 9.1% last month. Meanwhile, market participants are looking forward to Fed Chair Powell’s two-day testimony to the Congress for further clues as to whether the US central bank is poised to deliver another large rate hike at its July meeting. This will provide further cues for the Indian rupee going forward, which is still finding a lot of cushion around the 78.50 mark.”
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