INSUBCONTINENT EXCLUSIVE:
Rupee-dollar (INR-USD) rate: The rupee traded in the range of 68.57-68.80 against the dollar on MondayThe rupee (INR) made some recovery
against the US dollar (USD) on Monday
The rupee advanced by 15 paise to close at 68.72 against the greenback
Gains in the domestic equity markets, where the Sensex gained 276 points to register a five-month closing high, also supported the currency
Sustained dollar selling by exporters and banks amid a rally in equities and losses in the greenback pushed the rupee higher, say analysts
The rupee had settled at 68.87 against the greenback last Friday, marking a recovery of 8 paise from all-time closing low of 68.95 recorded
on July 5.Here are 10 things to know about the rupee's movement against the US dollar (INR vs USD) on Monday:1
The rupee traded in the range of 68.57-68.80, before setting at 68.72 for the day.2
Traders were cautious ahead of release of consumer price inflation (CPI) and Index of Industrial production data this week
The Central Statistics Office (CSO) is scheduled to release IIP and CPI data on Thursday.3
"A large part of the decline in the rupee coincides with the rise in oil prices in recent days (post the 22 June OPEC meet)
Oil has emerged as a major driver for the INR, while the trade and contagion risks have added to the pressures," HDFC Bank chief economist
Going forward, analysts expect the rupee to briefly weaken towards 69 against the US dollar in the short term.5
Salil Datar, CEO and executive director, Essel Finance VKC Forex, expects the rupee to trade in the range of 68.40-69.25 this week.6
Mr Barua of HDFC Bank expects the USD/INR pair to trade in the range of 68.2-68.8, with brief periods of it crossing the 69 level (where the
RBI is likely to intervene and provide support as sharp depreciation in the rupee could increase inflation).7
The rupee has shed nearly 8 per cent so far this year, making it the worst performing Asian currency.8
Moreover, the rupee is also likely to remain somewhat buoyed on expectations that the Reserve Bank of India could raise interest rates
The RBI is expected to raise interest rates again in the final three months of this year, according to a Reuters poll of economists
However, more than one-third of them predict a hike as early as at the next meeting in August.10
Investors will also watch the progress of monsoon for cues
This week, the focus will be on Inflation numbers, IIP data and monsoon, said Sanjeev Zarbade, vice president-research, Kotak Securities
"There is also GST council meet wherein rates could be reviewed
Globally, the focus will be on trade issues."(With agency inputs)
