Rupee likely to depreciate against the strong dollar, risk aversion in the markets; USDINR pair to trade within this range
The Indian rupee is expected to depreciate on Tuesday due to dollar strength and risk aversion in global markets. Market sentiments are hurt by concerns over supply chain disruption due to China’s Covid-19 lockdown, escalating geopolitical tensions in Ukraine and the world’s major central banks adopting aggressive monetary tightening to fight inflation. “Traders will remain vigilant ahead of the country’s inflation data. However, a sharp drop in the Rupee could be avoided if Crude Oil prices slow. US Dollar INR (April) is expected to trade in a range of 75 .90 to 76.30,” ICICI Direct said. In the previous session, the local unit stabilized almost at 75.94 (provisional) against the US Dollar, with weakness in domestic stocks negating the impact of falling crude oil prices.
Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services
“The rupiah came under pressure against the dollar, after a few days of narrow consolidation. The dollar was hovering around two-year highs, still supported by rising US Treasury yields. The dollar benefited from a hawkish Fed, which raised interest rates by 25 basis points at its March meeting and is expected to continue to climb as the year progresses. Market participants will focus on important inflation numbers in the US and on the home front; which, if reported above expectations, could further support the dollar’s move. We expect USDINR momentum to continue trading in the range of 75.80 and 76.25. »
Rahul Kalantri, VP Commodities, Mehta Equities
“The USDINR futures contract for April 27 failed to hold above 76.0600 and slipped again. On the weekly technical chart, a pair is trading above its resistance level of 75, 8000. According to the weekly technical chart, we have observed that a pair is holding above the 75.8000 levels and the technical indicators are showing positive momentum in the pair.Looking at the technical pattern, if a pair crosses and hold above 76.0600, may show more strength towards 76.3500-76.5500 in the coming sessions We suggest watching the 76.0600 level closely in today’s session to take positions in the pair.
Tapish Pandey, Research Analyst, SMC Global Securities
“The rupee-dollar is expected to trade firm as the dollar index trades above the 100 mark again, supported by strong US yields ahead of inflation data which is expected to show US prices rose the most in over 16 years, reinforcing expectations of aggressive Fed tightening On the chart, the short-term USDINR is trading sideways with support placed around the 75 levels .68 While on the upper side, the 21-day exponential moving average (EMA) resistance is seen near the 76.21 levels, holding above which may turn the trend into a positive sideways. Given rising yields, strong USD, high crude oil prices and outflows from FIIs, we expect the USDINR future to trade within a range of 75.70 to 76 levels, 34 with high volatility, where any decline towards 75.90 mark s can be used as a trading opportunity by holding the stop loss below the 75.70 levels.
Anindya Banerjee, Vice President, Currency and Interest Rate Derivatives at Kotak Securities
“USDINR has become quite choppy. Intraday breakouts and breakouts are failing as external factors remain mixed. but on the other hand, weak oil prices are a negative.The post-RBI political section of the market started betting that the RBI would intervene aggressively if the rupiah shows signs of weakening as this could hurt the inflation management.These periods are suitable for options sellers and therefore we prefer to focus on strategies such as short positions and long/short futures chokes.Hedged traders can opt for iron fly or the iron condor.
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