Rupee slides to 15-month low against dollar, firming crude oil prices pose greater risk: Experts
According to experts, rupee will continue to be in the range of 75.00-75.70 against the US currency in the near term as global crude oil prices are surging on the back of supply as well as demand-related issues weighing heavily on the domestic currency.
There seems to be no respite in sight for the falling Indian Rupee even after losing 37 paise in value against the dollar to settle below the crucial 75-mark for the first time this year as global crude oil prices are surging on the back of supply as well as demand-related issues weighing heavily on the domestic currency, say experts.
According to Jateen Trivedi, Senior Research Analyst at LKP Securities, rupee will continue to be in the range of 75.00-75.70 against the US currency in the near term.
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“Rupee traded weak again, as Black Gold keeps riding north touching $84.20 inching closer to $85.00. Added pressure on rupee on back of import bill rise. Rupee touched a low of 75.35. Going ahead rupee can be in the range of 75.00-75.60,” said Trivedi.
Echoing his views, the Currency Desk of Emkay Global Financial said that besides the uptrend in crude prices, rising US Dollar Index is contributing to a fall in the value of the rupee. The Desk further observed that if there is a break in the support range of 74.80-74.75, it may open doors for 75.75-level.
“The movement in rupee is mainly driven by the uptrend in crude and DXY. Some cooling off in crude prices and sell side RBI intervention may limit the trend in USDINR spot. But worries about US inflation are still alive and any upswing in US CPI this week, will boost expectations of an earlier FOMC rate hike next year after tapering, keeping the USDINR spot afloat,” the Desk in a statement.
So, this week, we expect the spot to trade in between 74.75-75.50. There lies a strong support around 74.80-74.75, a break of which may push the spot towards 74.50. While, on upside a break of 75.50, may open doors for 75.75, it added.
On Monday, the rupee slid by 37 paise to close at a 15-month low of 75.36 against the US dollar as crude oil zoomed towards seven-year high and the greenback hardened in the overseas markets.
The U.S. oil was up $1.51, or 1.9%, at $80.86 a barrel, the highest since the late 2014. The U.S. crude rose 4.6% through Friday, says a report by Reuters.
Similarly, Brent crude futures, the global oil benchmark, advanced 2.08 per cent to USD 84.10 per barrel as oil producers restrained supplies and leading energy consumers India and China grappled with energy crisis.
According to experts, a sharp advance in natural gas and coal prices is prompting a switch from these fuels to crude oil, ahead of the winter heating season posing further risk to the rupee value.
US crude prices have continued to firm up zooming towards seven-year highs, amid post-pandemic boom and supply bottlenecks. Besides, a sharp advance in natural gas and coal prices is prompting a switch from these fuels to crude oil, ahead of the winter heating season.
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