Rupee Outlook - March 23, 2022 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

The Indian Rupee depreciated against the U.S. Dollar on Tuesday.

However, depreciation was capped as exporters rushed to sell the U.S. currency after oil prices eased on speculation that talks to end the Ukraine conflict could lead to a breakthrough.

A rebound in local equities, in line with a broader rise in regional shares and dollar inflows for a large public sector company also helped the local unit this Tuesday.

The Rupee ended at 76.18 compared with 76.12 close on Monday.

Indian bond yields ended higher tracking a sharp spike in U.S. Treasury yields, however further upside was capped as oil price eased in the afternoon session.

The benchmark 6.54% bond ended at 6.83%, against 6.78% close on Monday.

The U.S. Dollar ended flat and was off session highs on Tuesday as a boost from comments by U.S. Federal Reserve Chair Jerome Powell faded.

On Fed speech, St. Louis Fed President James Bullard repeated his call for the Fed to move aggressively on Bloomberg TV.

The Euro, the Sterling gained against the dollar, while the Yen continued to weaken against the dollar on Tuesday.

Most of the EM and Asian peers ended stronger against the dollar on Tuesday.

The Indian Rupee could open stronger this Wednesday tracking overnight weakness in the greenback and oil.

However, appreciation bias could be capped as Fed speakers remain hawkish on the rate hike scenario and push yields higher.

The Rupee could likely open around 76.05/07 compared with 76.18 close on Tuesday.

Asian and EM peers were stronger this Wednesday morning and could lift sentiments.

NDF is at 76.05/17 this Wednesday morning vs a close at 76.04 on Tuesday.

Technically, if the USDINR Spot traded above 76.25 level it could continue its bullish momentum up to the resistance zone at 76.40-76.65. A trade below however could pull the pair to the support zone at 76.00-75.85.

The U.S. Dollar has started flat this early Wednesday morning in Asian trade as markets turned more positive on riskier assets and high commodity prices drove developments.

Technically, if Dollar Index trades below $98.60 it could witness a downside momentum up to the support zone at $98.25-$97.95. However, a trade above could push the Index to the resistance zone at $98.90-$99.25.

Source : Equity Bulls

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