Rupee likely to open lower following weaker peers; USDINR pair to trade with positive bias in this range

The Indian Rupee is expected to depreciate on Wednesday amid elevated crude prices. Investors’ focus will be on US Fed Chairman Jerome Powell’s appearance before the Senate; and CPI number from the UK. Over the near term, USDINR pair is likely to trade within a range of 77.80 and 78.40 with an upward bias. Snapping its three-day rising streak, the rupee declined against the US dollar in the previous session as persistent foreign fund outflows and a jump in crude oil prices weighed on investor sentiment. At the interbank foreign exchange market, the local unit opened at 78.00 and traded in a narrow range before it finally ended at 78.13, down 15 paise over its previous close.

Dilip Parmar, Research Analyst, HDFC Securities

“The Indian rupee is expected to open slightly lower following weaker peers. The yen’s slump may eventually lead to competitive devaluations across Asia starting with the Korean won and Chinese Yuan. USDJPY jumps to 136.49, reaching the pair’s highest since September 1998 and currently trading around 136.26. The forward markets indicate a 3-4 paise lower opening for the rupee at domestic bourses. Technically, spot USDINR is having resistance at 78.30 and support at 77.70. The bias remains bullish as long as the pair sustains above 77.70. The focus will be on Jerome Powell’s appearance before the Senate later today appears to be a cause of angst.”

Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities

“USDINR spot closed 9 paise higher at 78.09, thanks to importer hedging and oil demand. Over the near term we expect USDINR to trade within a range of 77.80 and 78.40 with an upward bias. With forward premium on a % of spot trading at 11 year lows, there will be more of importer demand and less of exporter selling. Carry traders may be disincentivized due such low premium.”

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