USD/INR: Rupee Skids for Third Straight Day, Nearing a Key Resistance Level 73.30The Indian rupee depreciated by nearly 15 paise against the U.S. dollar for the third straight day on Thursday despite strength in domestic equity markets, but a rise in U.S. inflation would put further pressure on the battered Asian currency.
The Indian rupee depreciated by nearly 15 paise against the U.S. dollar for the third straight day on Thursday despite strength in domestic equity markets, but a rise in U.S. inflation would put further pressure on the battered Asian currency.
The USD/INR breached the 73-mark, rinsing to an intraday high of 73.124 against the U.S. currency from Wednesday’s close of 72.98. The domestic currency has lost 26 paise in the last three trading sessions.
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The rupee June futures has support at 72.70 and breaking of the same will open for 72.40 while on the higher side 73.30 remains the resistance.
“USD/INR will likely stay in a descending triangle in the weeks ahead, considering uncertainties surrounding the Fed’s future monetary policy path. Meanwhile, we are keeping a close eye on market conditions, and will sell USD/INR spot with a target of 70.5 and a stop of 73.2 if the pair firmly falls below the 72.3 horizontal trend line of the triangle,” noted Qi Gao, Asia FX strategist at Scotiabank.
The dollar index, a measurement of the dollar’s value relative to six foreign currencies, rose to a high of 90.282. The index will rise further after the relatively impressive US consumer price index data, which rose by 5% year-on-year – the highest since 2008.
The Indian equity market witnessed a strong influx of retail investors, pushing the benchmark BSE Sensex index up 358.83 points or 0.69% higher at 52,300.47, while the broader NSE Nifty rose 102.40 points or 0.65% to 15,737.75.
On the other hand, global oil benchmark Brent futures rose 0.8% to $72.79 per barrel. Foreign institutional investors were net buyers in the capital market on Thursday as they purchased shares worth Rs 1,329.7 crore, as per exchange data.
The Indian rupee was one of Asia’s best performers, having risen 2.3% in May, but lost ground last week, its biggest decline in six weeks. The USD/INR is expected to rise about 2% to INR 74.00 against the U.S. dollar rate over the coming year.