The Indian rupee weakened by five paise to close at 85.58 against the US dollar on Friday in comparison to its previous close of 85.53 on Thursday. This significant depreciation comes amid various global and domestic economic factors influencing the currency markets.
The domestic currency opened 16 paise stronger at 85.37 against the US dollar, ahead of the GDP data release.
"A better-than-expected GDP figure, with markets expecting it around 6.7%, could spark a sharp appreciation in the rupee, particularly amid easing crude oil prices and a weakening dollar," said Amit Pabari, managing director at CR Forex Advisors.
According to Pabari, investors will be focusing on India's upcoming industrial and manufacturing production data, due later on Wednesday, with expectations on the downside amid the Trump administration's reciprocal tariffs, and first quarter GDP figures set for release this Friday.
In addition, he pointed out that weak equity markets, muted foreign inflows and a rebound in crude oil prices revived concerns about India's widening trade deficit.
Additionally, the US dollar softened on Friday as the dollar index fell to 99.42, while the US 10-year treasury bond yield softened to 4.415%. The dollar index is likely to report its fifth consecutive month of loss as traders brace for further bouts of uncertainty around trade.
Additionally, on Friday, crude fell with Brent crude falling to $63.04 per barrel. Adding to the positive cues, OPEC+ signalled a potential increase in oil output by 411,000 bpd from July, which could drag Brent crude prices below the $60 mar, Pabari said.
Taking these points into consideration he expects the USDINR pair to remain in a consolidation zone with resistance near 85.70-85.90 levels and strong support of 84.90-85.10 levels.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
