Rupee to appreciate on easing crude prices, weak dollar, USRINR pair to trade in this range

The Indian rupee is likely to appreciate on Thursday on weak dollar, easing crude oil prices. Rising risk appetite in global markets is also expected to support the domestic currency. The rupee appreciated 38 paise against the US dollar on Wednesday following a retreat in crude oil prices and rebound in domestic equities. At the interbank forex market, the local unit opened at 76.90 against the greenback and witnessed an intra-day high of 76.53 and a low of 76.92 before finally settling at 76.62, registering a rise of 38 paise over its previous close.

US$INR (March) expected to move towards 76.25 for the day- ICICI Direct

‘The dollar index slipped by 1.06% on Wednesday amid optimistic sentiments in financial markets. However, further downsides were cushioned on higher-than-expected JOLTs job openings data from the US. Rupee March futures appreciated by 0.41% on the back of muted crude oil prices and decline in dollar. However, continued FII funds outflows from domestic markets weighed on the rupee. The rupee is expected to appreciate today due to easing crude oil prices and softer dollar. Moreover, a rise in risk appetite in global markets may continue to support the rupee. However, expectations of higher consumer price reading from the US is expected to provide some support to the dollar. US$INR (March) is expected to move towards 76.25 for the day.’

Tapish Pandey, Research Analyst, SMC Global Securities

‘Indian Rupee likely to open higher tracking the broad dollar weakness came amid early sign of possible cease-fire between Russia-Ukraine. For the day, state election results gives more guidance in rupee price action. As per exit poll, ruling BJP is getting sweep victory in UP which will be positive for rupee. However any big deviation in the actual results may cap any major upside in rupee. On a cautious note, the war between Russia-Ukraine is not yet over and may change the market trend anytime. It is advisable to remain light on overnight positions.’

‘Dollar-Rupee has witnessed sharp rally in last two weeks knock all time high level however dollar is trading at overbought zone which is indicating possible revisal. For now support is placed around 76.00 76.03 levels if USDINR able to break below the same may correct further in near future. While on higher side resistance is seen near 77.30 above which uptrend will resume. As per current scenario we are expecting USDINR to trading in range of 76.00 to 77.30 future levels. For the intraday only we recommend to short USDINR on any bounce by keeping stop loss above 77.30 on downside possible target of 76.10 levels (all near month future levels).’

Amit Pabari, MD, CR Forex Advisors

‘The USDINR pair is expected to open sharply lower near 76.30 today and is likely to trade in the range of 76 to 76.30. Today, all eyes will be on 5 state election results. As per the latest poll update, BJP to retain UP & Uttarakhand; Shift of power in Punjab from Congress to AAP and a tight race in Goa. Globally, the market will be closely watching today’s US CPI data, which is expected to inch further higher at 7.9%. If data comes in line with expectations, then the market could fully discount the one-rate hike in the 16th March Fed policy. In ECB policy, president Lagarde’s statement will also be eyed. Overall, the reversal in the USDINR pair is likely to remain limited upto 76-76.30 zone. Amid weaker fundamentals and economic data, the pair could regain the momentum and test 77 to 77.50 over the short term. So, any dip towards the 76 mark will surely be an opportunity for the importers to hedge their short-term payables.’

Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services

‘Rupee traded higher in the yesterday’s session, after remaining under pressure in the past few sessions, supported by the weakness in the dollar and recovery in domestic equity markets. Ukraine President Zelensky said he is no longer pressing for NATO membership for Ukraine. Planned diplomatic talks between Russia and Ukraine buoyed sentiment. On other hand, Russian foreign ministry said that its better to achieve their goals through talks. This ease off in the geo-political tensions weighed on the crude oil prices and the dollar. Improved macroeconomic data from the eurozone lifted the currency. Today, focus will be on the ECB policy statement and expectation is that the ECB will wait until the last months of this year for its first interest rate rise in over a decade, hence comments from the Governor will be very important to watch for. We also have the important FOMC policy meet scheduled next week hence any updates. We expect the USDINR (Spot) to trade sideways and quote in the range of 76.05 and 76.70.’

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