Rupee Opens Stronger Against US Dollar After One Day Blip
Rupee is expected to trade in the range of Rs 85.00 and Rs 85.75.
The Indian rupee opened 28 paise stronger at Rs 85.27 against the US dollar on Friday, compared to its closing rate of Rs 85.55 on Thursday. It opened weak on Thursday, after opening with gains on Wednesday and Tuesday.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, provided insights into the day's trading range, predicting the rupee to fluctuate between Rs 85.00 and Rs 85.75. He advised exporters to hedge at Rs 85.50 to Rs 85.75, while importers might consider waiting to hedge closer to Rs 84.25 to Rs 84.50.
Brent oil prices remained relatively stable in Asian trading after significant declines the previous day, he noted. This was due to expectations of a US-Iran nuclear deal, which could lead to oversupply concerns in an already saturated market.
Brent oil was priced at $64.64 per barrel, with both contracts declining by over 2% on Thursday. "US President Trump indicated that the US and Iran were close to securing a nuclear deal, and Iran expressed readiness to sign if all sanctions are lifted. This could alter the demand-supply dynamics," Bhansali explained.
The dollar index fell to 100.64 as the US 10-year yield dropped to 4.4260%, following disappointing US data that reinforced expectations of multiple rate cuts by the Federal Reserve this year. "The US-China trade truce initially boosted the dollar index, but the excitement soon faded, leaving the index lower. The Korean Won rose sharply on news of discussions between Washington and Seoul about the Dollar-Won rate, earlier this month," Bhansali said.
Other Asian currencies also strengthened, with the Chinese Yuan at 7.1988 and the Indonesian Rupiah at 16,451. The Euro stood at 1.1205, the British Pound at 1.3312, and the Japanese Yen at 145.26, all gaining against the dollar.
"The Rupee is expected to remain within the Rs 85.25 to Rs 85.75 band, with exporters likely to sell on upticks and importers waiting for medium-term hedging opportunities. The Reserve Bank of India may have intervened at the Rs 85.75 level yesterday," Bhansali said.
