Rupee Vs Dollar: On expectations of a 25 bps to 50 bps increase in interest rate at the European Central Bank’s (ECB) monetary policy meeting scheduled on 21 July 2022 and slightly lower in dollar index trading in the morning session, the Indian National Rupee (INR) Gained a gain of 6 paise over the US. Dollar (USD) and rose to the level of 79.76 on Monday. At the interbank forex, the Indian rupee opened at 79.76 against the US dollar, gaining 6 paise over its previous close. In this morning’s session, the Indian currency traded with a high of 79.72 and a low of 79.81 against the US currency.
According to currency experts, dollar index The morning session on Monday has been eased as speculations are high that the ECB may announce a hike of 25 to 50 bps in the interest rate at its upcoming monetary policy meeting to be held on July 21, 2022. If the ECB decides to hike interest rates by 50 bps, the dollar index is expected to come down to 105 levels in the next fortnight, he added. He advised traders and forex investors to maintain a ‘sell on growth’ strategy as the dollar ECB is under heavy pressure to raise interest rates in its upcoming monetary policy meeting.
Speaking on the reason for the rise in the Indian rupee against the US dollar, Anindya Banerjee, Vice President, Kotak Securities said, “Speculations are high that the ECB will announce a 25 to 50 bps interest hike after its monetary policy meeting to be held on 21 July 2022. Due to this speculation, there has been a slight softening in the US dollar which has led to a rise in the Indian currency. If the ECB announces a 50 bps interest rate hike, the dollar index is expected to move up to 105 levels, thereby This will help the Indian rupee to appreciate further. To the level of 79 per dollar in the next fortnight.” He added that immediate support for the dollar index is placed at 107 and could be breached within this week if the ECB announces a 50 bps interest rate hike.
Echoing the views of Anindya Banerjee, Anuj Gupta, Vice President – IIFL Securities said, “There is nothing wrong with the Indian Rupee. Rate hike. Dollar index which used to hover around the 90 level suddenly jumped to 109.30 level. So, the recent depreciation in the Indian rupee is due to the strengthening of the US dollar. If we compare the Indian rupee with other major currencies, we find that the rupee has outperformed them by a good margin.”
“The reason for the better performance of Indian Rupee major currencies except US dollar is RBI’s policy towards inflation control. Government of India has managed to keep inflation under control and it is not a big issue for us like it is US, European Union and other major economies,” said Anindya Banerjee of Kotak Securities.
Advising forex traders and investors to maintain ‘Sell on Rise’ in USDINR, Anuj Gupta of IIFL Securities said, “We can sell USD at 80 levels with stop loss at 80.40 for a target of 79.40″. Huh.”
The Indian rupee on Friday closed higher by 17 paise at 79.82 against the US dollar from around 80 levels.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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