Rupee Outlook: Indian currency on recovery path, likely to trade in 80-82 range against US dollar - know what analysts say

Indian Rupee is on the recovery path and may appreciate to a level of 80.5 against the US dollar on the mid to long-term basis, several analysts said, adding that the domestic currency is expected to briefly trade range-bound between 80-82 levels on the back of muted domestic trends. 

The local currency on Monday depreciated by 48 paise to close at 81.26 (provisional) against the US dollar, tracking the recovery in the American currency. Forex traders said rising crude oil prices also weighed on investor sentiments, a news agency PTI report said. 

The major reason behind the sharp depreciation in the domestic currency is the strong demand from oil importers as a bargain-buying opportunity after the steep decline of around 4 percent witnessed in the dollar last week, Sugandha Sachdeva, Vice President - Commodity and Currency Research, Religare Broking said.

Sachdeva reckons the Indian rupee to move in a band of 80-82 mark in the coming days.  

She added, “A lower CPI data for October (YoY) has raised hopes that inflation in the US has peaked and that the Fed is nearing the end of its rate hike cycle, but comments from a Fed official have dampened the hopes while pushing treasury yields and the greenback on a higher incline.” 

Similarly, ICICI Securities Research Analyst Pankaj Pandey in his outlook said, “The rupee is expected to trade with a positive bias amid persistent foreign investors inflows in Indian markets and weakness in the dollar.”  

“US$INR (November) is expected to trade towards the level of 80.50 against the US dollar,” the analyst at ICICI Securities said. 

The US dollar extended its fall by 1.41 per cent on Friday amid a rise in risk appetite in global markets, besides, dollar weakness was an extension of the move set off after Thursday's data showed US consumer inflation rose 7.7 percent on-year in October, the slowest rate since January. 

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.59 per cent to 106.91. While global oil benchmark Brent crude futures declined 0.63 per cent to USD 95.93 per barrel. 

On the domestic equity market front, the 30-share BSE Sensex fell 170.89 points or 0.28 per cent to end at 61,624.15, while the broader NSE Nifty declined 20.55 points or 0.11 per cent to 18,329.15. 

Foreign Institutional Investors (FIIs) were net buyers in capital markets as they purchased shares worth Rs 3,958.23 crore on Friday, according to exchange data. 

With PTI Inputs