Rupee depreciates on strong dollar, risk aversion in markets; USDINR pair likely to trade in this range

Rupee depreciates on strong dollar, risk aversion in markets; USDINR pair likely to trade in this range

The Indian rupee depreciated 66 paise to 81.57 against the US dollar in early trade, tracking the strength of the American currency in the overseas market and a muted trend in domestic equities. In the previous session, rupee appreciated against the US dollar on positive domestic macroeconomic data and easing crude oil prices. Sustained foreign fund inflows also supported the local unit. At the interbank foreign exchange, the domestic unit opened at 81.18 against the dollar, then gained further ground to touch 81.14, registering a rise of 14 paise over its previous close.

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“USDINR spot closed 16 paise lower at 81.10, thanks to weakness in the US Dollar index and rally in stocks. Global risk-on mood, hopes of better geo-political backdrop after G-20 meeting and better-than-expected economic data from Europe lifted sentiments and helped the Rupee strengthen. USDINR can see more downside over this week. We could see exporters driving USDINR towards 80.50/60 levels on spot. We expect a range of 80.50 and 81.50.”

Amit Pabari, MD, CR Forex Advisors

“RBI has been a buyer of USD which shall hold the domestic dollar demand in place and will likely keep the near-term bottom of 80.80 levels protected. Any bounce back towards 81.50-82.00 levels can be taken as a selling opportunity as the overall trend in the DXY seems to have changed post a crucial 109.50 level’s breakdown. Also, foreign inflows resumed yet again bringing about $3 billion to the country. Hence, the clear shift from buy on dips to sell on the rise is evident in the current scenario which can be subject to evolvement from time to time considering the volatility.”

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Rahul Kalantri, VP Commodities, Mehta Equities

“The USDINR 28 November futures contract was unable to cross 81.70 levels and slipped again. On the daily technical chart the pair is trading below its resistance level of 81.70. RSI is fetching below 50 levels and MACD is showing negative divergence on the daily technical chart. As per the daily technical chart, we observed that the pair slipped below its resistance level of 81.70 and showed negative divergence. Looking at the technical set-up, a doji candlestick pattern is seen on the daily technical chart and is showing weakness in the pair. If the pair sustains above 81.70 levels, it could show further strength, else could test its support levels of 80.80-80.55 again.”

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