NEW DELHI:
High Crude oil prices along with a wider monthly trade deficit are expected to subdue the Indian rupee in the coming week.
Accordingly, the rupee is expected to seesaw between 74.50 to 75.59 to a greenback.
Lately, the Brent-indexed Crude oil’s price has hovered over $91 per barrel.
The latest official data showed that India’s trade deficit widened by 20.23 per cent on a year-on-year basis to $17.42 billion in January 2022 from $14.49 billion in the like period of 2021. It had widened to $15.30 billion on January 2020.
“Geo-politics shall guide the way forward. A trade deficit of around $18 billion dollars per month shall also keep the rupee’s strength in check. Inflation is also expected to be sticky with domestic fuel prices awaiting a big hike,” said Sajal Gupta, Head, Forex and Rates, Edelweiss Securities.
Last week, the rupee was weighed down against the US dollar following a rise in tensions between Russia and Ukraine.
However, as the week came to an end, tensions between the two nations started to recede and the rupee appreciated sharply.
Consequently, the rupee closed at 74.65 to a US dollar.
Other factors, such as corporate inflows and dovish statements from the US Fed, aided the currency.
“Spot USD-INR has support at 74.30, the 200-day simple moving average, while resistance is at 75.21,” said Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities.
According to Gaurang Somaiya, forex and bullion analyst, Motilal Oswal Financial Services: “Next week, market participants will be waiting for more clarity on the ongoing geopolitical tension and increased uncertainty.” (IANS)