A stronger dollar could lead to a devaluation of the rupee, FII outflows; Pair USDINR to trade

The Indian rupee may depreciate on Thursday amid strong dollar and risk aversion in global markets. The steady flow of FIIs is also expected to weigh on the domestic currency. According to analysts, USDINR may be limited between 76.80 and 77.70 levels due to RBI intervention and IPO related FPI inflows. The rupee strengthened further against the US dollar in the previous session as the US currency retreated from its 20-year high. In the interbank Forex market, the domestic unit opened at 77.24 against the greenback and moved in the range of 77.17 to 77.31 during the day’s trading and before registering at 77.24, registered a 10 paise increase over its previous close.

Anindya Banerjee, VP, Currency Derivatives and Interest Rate Derivatives in Kotak Securities

The USDINR spot closed 9 paise lower at 77.25. Most currencies tonight were USDINR and rangebound, with flat transactions before important US inflation data. In the near future, USDINR may be limited to 76.80 and 77.70 levels due to RBI intervention and IPO related FPI inflows. “

Praveen Singh – AVP, Basic Currency and Commodity Analyst, Shareholder of BNP Parishad

“Yesterday, the Indian rupee showed gains and losses as the US 10-year yield returned below the 3% mark. The sense of risk is positive because China has filed less cowardly cases. There are also reports of RBI intervention in futures markets. The fall in crude oil prices over the last few sessions has also supported the rupee at lower levels. The dollar is depreciating from higher levels in positive Asian and European markets and US Treasury yields have declined. However, risk aversion in the domestic market and sustainable FII outflows are capturing sharp gains in domestic currencies. “

“FIIs were net sellers for the seventh consecutive session on Tuesday and sold assets worth around Rs. 3960 crore. Net FII inflows stood at Rs 20,055 crore in May. Amid concerns over the US Federal Reserve and the global economic downturn, the domestic currency is expected to trade less on sustainable FII outflows, although recent crude oil prices and further RBI intervention could support the rupee at lower levels. The rupee may trade in the 76.50-78.20 range in the next few sessions. “

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

“The rupee has consolidated in a narrow range since the fresh all-time low earlier this week. On the domestic front, market participants were cautious ahead of the inflation numbers released on Thursday. The number is expected to rise above 7 percent. From the United States, the CPI number is expected to be higher and higher. “

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