Quote on Rupee 17 August 2022 By Ms. Sugandha Sachdeva, Vice President - Commodity & Currency Research, Religare Broking Ltd
The Indian rupee has edged higher amid a “risk on” mood and splendid gains witnessed in the domestic equities. After almost nine months of incessant outflows, domestic equities are seeing net inflows since July. Besides, the decline in crude oil prices has eased concerns about elevated inflation, further supporting the domestic currency.
On the contrary, retreat in the dollar index from a six-week low tested last week is still acting as a key headwind for the local unit and restricting gains in the rupee-dollar exchange rate beyond the 79.20 mark. The greenback hit a low of 104.63 last week amid a softening of inflation in the US, which eased bets of another large rate hike at the Fed’s September meeting. However, inflation remains pinned around 40-year highs and hawkish comments from several Fed officials indicate that the US Fed is still likely to opt for steep rate hikes and act tough on persistently high price pressures.
Markets are now eyeing the minutes of the Fed’s July meeting for further cues about the monetary policy path of the US central bank that will further dictate the trend for the Indian rupee. We envisage the rupee to trade in the 79.20-80.10 range in the coming days.
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