The Indian rupee fell 66 paizuri against the US dollar to 81.57 in early trading on the strength of the US dollar in overseas markets and the weakening trend in domestic stocks. In the last session, the rupee gained against the dollar on strong domestic macro data and lower oil prices. A continued influx of foreign capital also supported local units. In interbank forex trading, the domestic unit opened at 81.18 against the dollar before rising further to reach 81.14, 14 pips higher than the previous close.
“USDINR spot closed 16 pices lower at 81.10 on weaker US dollar index and higher equities. Better-than-expected economic data from Europe fueled sentiment, boosting the rupee’s rally USD-INR could fall further this week, see exporters pushing USD-INR locally to 80.50/60 I was able to do it, and expect a range of 80.50 to 81.50.”
The RBI is likely to be a US dollar buyer, sustaining domestic dollar demand and defending the short-term bottom at 80.80. A return to 81.50-82.00 can be used as a selling opportunity as the overall DXY trend appears to have changed after the critical 109.50 level collapse. Foreign inflows have also resumed, bringing about $3 billion to the country. Given the volatility, therefore, a clear shift from buying dips to selling ups is evident in the current scenario, which may evolve from time to time.