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Below are Views On Currency Update by Heena Naik, Research Analyst - Currency, Angel One Ltd

There is a possibility that the Indian currency (CMP: 73.65) shall weaken towards 73.90 levels; break of which could push the currency towards 74.10 and lower levels. Reason behind the same could be attributed to a jump in crude oil prices to the highest level in almost three years amid dollar weakness and upbeat risk appetite. 

Markets believe that this increase in oil prices would further intensify fears around the outlook for inflation. The impact on inflation and the overall Indian economy is more pronounced with the country importing almost 80% of its crude oil requirements. According to estimates, every $10 increase in oil prices pushes India’s inflation up by 50 basis points. 

On the flip side, the bearish trend in US Dollar Index along with an unrelenting equity rally in India could cap sharp losses in Rupee. 

Focus this week would be on news related to China Evergrande and the speech of several U.S. Federal Reserve officials including Chair Jerome Powell. Powell will be speaking after last week’s meeting at which the central bank indicated it would likely announce at the November meeting reducing the pace of bond purchases.

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