After a two-day losing streak, the rupee settled to a flat note on Wednesday, August 11, falling a paisa against the US dollar, at 74.44, following a muted trend in domestic equities. In the interbank currency market, the domestic unit opened at 74.43 against the dollar and registered an intra-day high of 74.37. It witnessed a low of 74.48. The domestic currency closed at 74.44 against the greenback, registering a one-paisa decline from its previous close.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, climbed 0.11% to 93.16.
What analysts say:
Mr. Amit Pabari, MD, CR Forex:
US Markets – Dow and S&P tested another all-time high yesterday after the US Senate passed a $1 trillion infrastructure bill. This bill will provide the country’s largest investment in roads, bridges, airports and waterways in decades.
The market has turned its attention to today’s release of US inflation, which is expected to show a sustained increase; albeit at a slower pace than in June. However, unexpected higher numbers are sure to help the US DXY surpass its recent high of 93.20 and reach 93.50 levels.
The RBI, which has remained intolerant of the rupee movement’s appreciation, may continue to hold around the 74.20-30 levels. In the near term, we expect the USDINR pair to trade in the 74.10-74.90 range as IPO flows couldn’t easily depreciate it, but a stronger DXY could keep pressure on the rupee.
If the pair convincingly crosses 74.90 as a result of the Fed taper-led breakout in DXY and weakening domestic fundamentals, we could see the pair move towards the 75.30 and 75.50 levels.”
Anindya Banerjee, DVP, Currency Derivatives and Interest Rate Derivatives at Kotak Securities:
USDINR continued to languish in a narrow range as positive signals from the strong US Dollar Index are offset by FPI flows in the primary market and soft oil prices. Spot closed close to 74.44 levels. Tonight’s focus will be on US CPI inflation data.
A softer print could put downward pressure on USDINR tomorrow. However, RBI remains an aggressive buyer and therefore USDINR will continue to be supported at lower levels. We are looking for USDINR to trade locally within a range of 74.25 to 74.65 levels.”
Kshitij Purohit, Lead International & Commodities at CapitalVia Global Research Limited:
The United States reported nearly a million Covid-positive cases in one week, while job vacancies in the United States hit a new high in June, with hiring ramping up and wages continuing to rise, putting more pressure on the dollar index. . The 10-year US bond is also returning from its recent lows of 1.17 to 1.32. As a result of a turnaround in the dollar index and US bond yields, most Asian and emerging market currencies were under pressure.
On the domestic front, USD/INR opened positively in August and has moved in a slightly sideways trend towards a bearish trend since morning. Prices are respecting the Bearish trendline which has also been tested as a relevant resistance level in the past few sessions.”
Domestic stock markets today:
In the domestic stock market, the BSE Sensex finished 28.73 points or 0.05 percent lower at 54,525.93, while the broader NSE Nifty finished 2.15 points or 0.01 percent higher at 16,282.25. Buying interest in metal stocks such as Tata Steel, Hindalco, Vedanta and heavyweight Reliance Industries helped benchmarks recover from low intraday levels.
Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities Ltd:
“Benchmark Nifty witnessed a technical sell-off and fell below the 16300 level. During the last four trading sessions, the index traded within the range of 16180-16350 levels. The structure of the chart suggests that narrow-range activity is likely to continue for the foreseeable future.
For day traders, the 16180 levels would be the main support level and if you trade above that, the uptrend could likely continue all the way to 16350. Any further rise in the market could push the index up to 16400-16425 levels. On the other hand, the uptrend would be vulnerable below 16180.”
According to exchange data, the foreign institutional investors were net sellers in the capital market on Aug. 10 when they sold shares worth Rs 178.51 crore. Futures on Brent oil, the global oil benchmark, rose 0.30 percent to $70.84 a barrel.