Weekly Rupee View: INR breaks out of a barrier 

[ad_1]

Over the past week, the rupee (INR) made good gain against the dollar (USD). Although the local currency closed almost flat on Monday, the bias appears positive. On Monday, it closed at 81.92. The domestic currency has gained 1 per cent year-to-date against the dollar. Consequently, it is one of the best performing Asian currencies so far in 2023.

Supporting the rupee, the foreign flows have been good in March. According to NSDL data, the net inflow in March stands at $1.1 billion. Also, the dollar, on the face of a resistance, was unable to extend the upside in the past few sessions. The Indian currency is also supported by a rebound in the domestic equity market. As it stands, further appreciation in rupee looks highly likely.

Chart

The rupee broke out of the 82.40 – 83 range towards the end of last week. It marked a one-month high of 81.62 on Monday before closing a little lower at 81.92. While INR might dip to 82 or 82.10 from the current level, we expect it to regain traction and move towards 81 in the next couple of weeks. After hitting 81, we might see a minor decline.

But if the Indian unit surpasses 81, it can appreciate to 80.50 or to 80, which are the notable resistance levels above 81.

The dollar index (DXY) is struggling to breach the resistance at 105.20 and it has come off this level. It is currently trading at around 104.50. The price action suggests that DXY could remain flat in the coming week. It might keep fluctuating between 103.60 and 105.20 in the short-term.

Outlook

While there are chances for the rupee to see a slight moderation from the current level, the weakness could be limited to 82 and 82.10. Overall, the bias is positive and we expect the Indian currency to rise towards 81 against the dollar in the near-term.



[ad_2]

Source link

Leave a comment

Your email address will not be published. Required fields are marked *

3 + 11 =

×