Currency trading: Today, on Monday, January 13, the Indian rupee fell by 61 paise and closed at Rs 86.61 per dollar. Whereas on Friday it closed at Rs 85.97 per dollar. Jatin Trivedi, VP Research Analyst Commodity and Currency at LKP Securities, says that the rupee closed at 86.61 with a huge fall of 61 paise. This is its lowest level amid a sharp decline of more than 1 percent last week. This decline has come due to rising prices of crude oil. Crude oil climbed above $81 per barrel after the Biden administration imposed sanctions on Russia. Rising crude oil prices have further increased India’s import bill, putting pressure on the rupee. The trading range for the rupee is seen between support near 87.00 and resistance near 86.25. The market continues to keep an eye on geopolitical developments and commodity trends.
Anuj Chaudhary, Research Analyst at Mirae Asset Shares It is said that due to the strength of the dollar and the weakness of the global markets, today the Indian rupee crossed the level of 86 and reached a new low. FIIs remain net sellers, while crude oil prices have increased by about 2 per cent. The US dollar gained momentum as the US non-agri payroll report was better than expected. Due to which the possibility of the US Federal Reserve not increasing interest rates in January has increased. Michigan 1-year inflation expectations also came in higher than expected at 3.3% in January, compared to 2.8% in December.
Anuj Chaudhary believes that the rupee will remain weak due to strong dollar and weakness in domestic markets. Rising crude oil prices and risk aversion trend in global markets can also impact the rupee. Traders may remain cautious ahead of inflation data coming from India and America this week. USDINR spot price is expected to range between Rs 86.25 to Rs 86.80.
The reason for this unprecedented fall in the rupee is being attributed to the continuous strengthening of the US dollar. Due to which there has been a huge withdrawal of foreign capital from the Indian stock markets. Foreign institutional investors (FIIs) sold shares worth Rs 2,254.68 crore on Friday. According to exchange data, so far this month they have withdrawn Rs 22,194 crore from the Indian equity market.
Market outlook: Market closed down for the fourth consecutive day, know how it may move on January 14
According to foreign exchange analysts, amidst the decreasing currency reserves, the Reserve Bank of India may also change its stance towards stabilizing the exchange rate of rupee against the dollar. “The RBI may ignore rupee weakness amid rising demand and falling supply,” said Anil Kumar Bhansali, treasury head and executive director, Finrex Treasury Advisors LLP.
Market experts said the dollar strengthened due to better-than-expected employment growth in the US economy, which led to a rise in benchmark Treasury yields amid expectations of a slow cut in interest rates by the Federal Reserve.
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