By Rohit Vaid.Mumbai, Nov 14, : .The anticipated rise in trade deficit to $20 billion this month and high crude oil prices will further weaken the Indian rupee over the coming week.
The rupee is likely to range near 75 to a US dollar during this period.This period will see the rupee fluctuate between 75 and a US Dollar.
India’s trade deficit is rising as the economy recovers and imports swell.As India recovers, imports rise and the trade deficit in India increases.
Besides, FIIs have been on a selling spree in India’s equity market.
FIIs are also on a selling spree within India’s equity markets.However, the rate of share off-load has significantly come down during the last few sessions.
However, the share offload rate has been significantly lower in the last few sessions.
“With the economy reaching normal levels, imports shall increase and we expect trade deficit to hit $20 billion a month,” Edelweiss Securities’ Head, Forex and Rates, Sajal Gupta, said.”With the economy at normal levels, imports will increase and we expect trade surplus to reach $20 billion per month,” Sajal Gupta (Head, Forex and Rates), Edelweiss Securities, stated.
“Crude is also expected to remain strong on back of global demand coming back.
Global demand is expected to continue to drive rupee’s strength.This might lead rupee to seesaw between 74.25 to 75.25 with a weaker rupee bias.With a weaker rupee bias, this could cause rupee to fluctuate between 74.25 and 75.25.Taper risk shall keep the rupee from strengthening.”.The rupee will not strengthen due to the taper risk.
Motilal Oswal Financial Services’ Forex and Bullion Analyst Gaurang Somaiya said: “Next week, on the domestic front, trade balance will be the only important data to watch for.Gaurang Somaiya, Motilal Oswal Financial Services’ Forex and Bullion Analyst, stated that trade balance would be the most important data next week.FIIs who have been net sellers in the secondary market if they continue to do so could further put the rupee under pressure.”.If they keep selling in the secondary market, FIIs that have been net sellers could put further pressure on the rupee.
“We expect the momentum for the rupee would continue to remain positive and it could quote in the range of 74.05 and 75.20.”.”We believe that the momentum for rupee will continue to be positive, and it could quote between 74.05 & 75.20.”
In November, FIIs have been net sellers to the tune of $600 million.November saw FIIs sell net for $600 million.
Last week, the rupee closed at 74.44 to a USD.The rupee closed last week at 74.44 USD.
“USDINR will find barrier at 74.7 while it is likely to find support near 74 levels this week,” HDFC Securities’ Deputy Head of Retail Research, Devarsh Vakil, said.Devarsh Vakil (Deputy Head of Retail Research at HDFC Securities), stated that USDINR would find a barrier at 74.7, but it will likely find support near the 74 levels this week.
“We continue to favour a view that USDINR pair is likely to strengthen towards 73.5 mark over the next few months in the medium term.”.”We remain convinced that USDINR pair will strengthen to 73.5 mark in the medium-term.”
(Rohit Vaid can be contacted at rohit.v@ians.in).Contact Rohit Vaid at rohit.v@ians.in
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