A strong US dollar as well as global concerns over the Covid-19 pandemic is expected to weaken the Indian rupee further during the upcoming trade week.
“Global cues such as a strong US dollar as well as a weak CNH (Renminbi Offshore) will weaken the Indian rupee further. It is expected to trade between 74.25 to 74.60 with an depreciation bias,” said Sajal Gupta, Head, Forex and Rates at Edelweiss Securities.
On Friday, the Indian rupee marked its biggest weekly loss in one-and-a-half months, although it was better than its Asian peers.
It weakened to 74.36 per USD due to US Fed’s tapering fears and softer commodity prices.
“Concern that the Delta virus strain could derail the global recovery led to safe haven buying in dollar and risk sentiment took a severe beating this week,” said Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities.
“Fears of early tapering by US Federal Reserves led to strength in dollar. Dollar index rose to the highest level since November. Spot USDINR is still in the range of 74.50 to 74.10 this month. We expect it to appreciate back to 74-mark next week,” Vakil added.
Gaurang Somaiya , Forex & Bullion Analyst, Motilal Oswal Financial Services, said: “Volatility for the dollar could remain elevated ahead of the important Jackson Hole Symposium that is scheduled next week. Expectation is that the Fed Chairman could signal that the US central bank is ready to start easing monetary support.
“For the week, the USDINR (Spot) is expected to trade with a positive bias and quote in the range of 74.05 and 75.20.”