IGI Logo

Below are Quote on Rupee by Ms. Sugandha Sachdeva, VP- Commodity & Currency Research, Religare Broking

The domestic currency gained by more than two percent in May amid ample liquidity, dollar weakness and ‘risk-on’ sentiments in the global markets, largely overlooking the economic woes caused by the second wave of the pandemic back home. Despite the sharp appreciation witnessed last month, the Indian rupee could not surpass the invincible 72.20 mark, a level which was last seen in March 2021 and has reversed course from the vicinity of that crucial hurdle area. The recent weakness has been triggered primarily due to concerns about soaring crude oil prices wherein they are hovering at their highest since Oct 2018, amid a continuously improving fuel demand outlook. The domestic currency has also reacted to subdued domestic equities and retreat witnessed in the greenback from four-month lows. Notwithstanding the hot inflation reading from the US, markets are now focused on the key jobs report for May which will provide cues about the health of the economy and influence the talk surrounding the taper of Fed’s bond-buying program. Furthermore, RBI monetary policy review will also be on the street's radar. Moving ahead, the rupee is likely to witness heightened volatility and is projected to trade in a band of 72.50-73.50 in the near term.

Above views are of the author and not of the website kindly read disclaimer