The rupee is expected to depreciate on Friday amid a firm dollar and pessimistic global market sentiments. Further, investors will remain vigilant ahead of RBI’s monetary policy, where the central bank is likely to maintain status quo. ” Focus will be on statements and inflation projections to get hints on future monetary stance. US$INR (April) is expected to trade in a range of 75.80-76.35,” said ICICI Direct. Rupee declined 11 paise against the US dollar in the previous session as the hawkish stance of the US Fed affected investor sentiments in global markets and bolstered the American currency. The local unit opened at 75.88 against the greenback, then slipped further to 75.99 before recovering a little and settling at 75.95, down 11 paise over its previous close.
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services
Rupee continued to remain under pressure primarily as the dollar rose against its major crosses after a hawkish fed meeting minutes. On the domestic front, focus will be on the RBI policy statement; expectation is that the central bank could keep rates on hold but its stance is now that the Russia-Ukraine conflict has affected crop sowing and thus food inflation is going to be there. Inflation forecast to remain high above the RBI’s 4% medium-term target and the central bank could now start worrying about inflation, especially with global peers already rising rates to counter price surge.”
“Yesterday, one of the policymakers at the BoJ mentioned the benefits of a weak yen outweigh the demerits for Japan’s export-oriented economy thereby fuelling further weakness to Japanese Yen that has been consistently under pressure. Today, volatility for major crosses could remain low as no major economic data is expected to be released from the US. We expect the USDINR(Spot) to trade sideways to positive and quote in the range of 75.70 and 76.20.”
Sugandha Sachdeva, VP- Commodity & Currency Research, Religare Broking
“The Indian rupee has slumped sharply after facing stiff resistance at the 75.20 mark and erased all of the gains recorded earlier in the week in tandem with the losses witnessed in domestic equities and strength seen in the greenback. The dollar index has surged close to two-year highs as the US Fed March meeting minutes have indicated that the Fed is preparing to move aggressively in order to curb high inflation at its future meetings. Besides, prospects of further sanctions being imposed on Russia by the Western nations have spooked the market sentiments.”
“Going ahead, markets would be closely eyeing the RBI policy meet outcome for further cues that would steer the rupee-dollar exchange rate. Geo-political worries, elevated inflation, and concerns about downside risks to growth from the rising prospects of bigger interest rate hikes by the US central bank this year remain the key headwinds for the domestic currency. As of now, the Indian rupee is likely to gyrate in the range of 75.20-76.50 in the near term.”
Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities
“USDINR spot closed 20 paise higher at 75.96 on spot due to hawkish US FOMC minutes. The US Fed has hinted at a few 50 bps rate hikes and also nearly $100 billion per month of balance sheet reduction. This can be termed as quite hawkish and sets the stage for a stronger US Dollar over the medium term. Oil prices have come-off and its trading near $104 on Brent and that is offering some comfort to the Indian Rupee. However, weak equity markets and strong US Dollar Index will weigh on the USDINR currency pair. We expect a range of 75.70 and 76.50 on spot over the near term.”
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