Rupee Opens Stronger Against US Dollar, May End Week On High Note
Rupee is expected to trade between Rs 86.35 and Rs 86.95 on Friday.
The Indian Rupee opened 10 paise stronger against the US Dollar on Friday, starting the day at Rs 86.63 compared to the previous close of Rs 86.73.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, suggested that exporters hedge near Rs 86.85-90, while importers might consider waiting for better hedging opportunities.
Global market dynamics also played a role in the Rupee's performance. White House statement indicated that a decision on potential military action against Iran would be made in two weeks, providing some relief across various asset classes, Bhansali noted.
Brent oil prices, which had surged nearly 3% overnight, fell to $77.16 per barrel but remained on track for a third consecutive weekly gain. This was despite ongoing hostilities between Israel and Iran, which saw Israel bombing Iranian nuclear facilities and Iran retaliating with missile strikes. The heightened tensions have led to increased tanker rates as ships avoid the Strait of Hormuz, he further added.
In Asian markets, the Nikkei was down by 0.10%, while the Hang Seng and China indices were up by 0.73% and 0.38%, respectively. Overnight, the Dow and S&P closed lower, whereas the Nasdaq saw gains. Gift Nifty was up by 36 points on Friday morning.
The dollar index fell to 98.65 after trading above 99 overnight. US 10-year yields remained steady at 4.3980%. The Euro rose to 1.1515, and the GBP increased to 1.3485. The Yen stood at 145.29 despite Japan's core CPI coming in higher at 3.7% against the expected 3.6%. Among Asian currencies, the CNH rose to 7.1821, Indonesian Rupiah to 16,372, and Korean Won to 1,372.
Bhansali also highlighted the ongoing uncertainty due to the Iran-Israel conflict and the postponement of US involvement by two weeks. The Rupee, which closed lower at Rs 86.7225 and hit a three-month low of Rs 86.90 on Thursday, is expected to trade between Rs 86.35 and Rs 86.95 on Friday, he said.
Exporters have a good opportunity to sell dollars, as the Rupee could strengthen to Rs 85.50-75 levels in July, once the conflict subsides. Importers are advised to wait for hedging opportunities below Rs 86, he added.
