The Indian rupee opened 6 paise weaker at 85.86 against the US dollar on Friday, in comparison to its previous close of 85.80 on Thursday. This slight depreciation comes amid various global and domestic economic factors influencing the currency markets.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, provided insights into the day's trading range and hedging strategies. According to him, the rupee is expected to trade in a range of 85.50 to 86.25, with a close watch on Reserve Bank of India's decision.
"We have the monetary policy, in which RBI is expected to cut rates by 25 bps. The narrowing interest rate differentials have been aiding in the weakening process of the rupee," said Bhansali.
He advised exporters need to hedge near 86 and importers to wait for hedging purposes.
Additionally, the US dollar is headed for a weekly loss on Friday, undermined by signs of fragility in the US economy and as trade negotiations between Washington and its trading partners made little progress despite a looming deadline.
The euro was at 1.1495, while the Japanese Yen was at 143.79. Among Asian currencies, the Chinese Yuan gained to stand at 7.1804, the Indonesian Rupiah was at 16,245 and the South Korean Won was at 1,357.
On Friday, crude extended decline for the fourth day with Brent crude— the global benchmark for crude oil—falling 0.23% to $65.19 as investors remained on an edge over slowing growth and weakening demand, although increased actions between Russia and Ukraine limited losses.
Despite being down for four sessions, crude is likely to be in positive for the week but demand fears remain, as US may put more sanctions against Russia and there were strains in US-Iran talks. It was also up last week as OPEC+ boosted supply, in line with market expectations.
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