ICICI Direct’s currency report on USDINR
The rupee appreciated against the US dollar on Wednesday, supported by easing crude oil prices and likely dollar selling by the Reserve Bank of India (RBI). USDINR is expected to rise towards 83.30, as long as it holds above 82.80. The hawkish comments from the US Federal Reserve are likely to support the dollar. USDINR is expected to find support near 83.00 and move towards 83.40. A move above 83.40 would open the doors towards 83.60.
Analysis
The rupee’s appreciation against the dollar on Wednesday was driven by a combination of factors, including easing crude oil prices and likely dollar selling by the RBI. Crude oil prices have declined in recent weeks, which has reduced India’s import bill and supported the rupee. The RBI is also likely to have sold dollars in the market to support the rupee.
The US Federal Reserve’s hawkish comments are likely to support the dollar in the near term. The Fed has signaled that it will continue to raise interest rates to combat inflation. This is likely to lead to higher US Treasury yields, which would make the dollar more attractive to investors.
Outlook
USDINR is expected to trade in a range of 82.80-83.40 in the near term. A move above 83.40 would open the doors towards 83.60. On the downside, support is seen at 83.00.
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