Indian Rupee INR Update: Why experts believe domestic currency may continue its appreciation journey – know resistance/support

Indian Rupee INR Update: On the back of strong global cues, the Indian Rupee (INR) has appreciated in the recent past, perked up by around 0.5 per cent or 36 paise to close at 79.17 against the US dollar on Tuesday. Experts believe that the appreciation of the Rupee may continue amid a decline in the dollar index and strong portfolio inflows. 

Sugandha Sachdeva, Vice President - Commodity and Currency Research, Religare Broking foresees some resistance for the rupee-dollar exchange rate at the 79-mark, while a breach of the same would pave the way for the 78.5-mark in the coming days. 

At the interbank forex market, Rupee opened at 79.30 against the greenback and witnessed an intra-day high of 79.03 and a low of 79.33 during the session, eventually to end at 79.17, up 36 paise from its previous close of 79.53 today. 

Similarly, ICICI Direct Research expects the rupee to trade with a positive bias in the coming days. Moreover, weakness in US dollar index and sharp drop in crude oil prices will support the rupee to appreciate further.  

Investors will keep an eye on major economic data from the US like CPI, PPI, initial jobless claims and retail sales data next week, the domestic brokerage house said on commodity and currency outlook. 

“The greenback has reversed course amid expectations of a cool-off in inflation and eventual softening of the Fed’s aggressive policy stance,” Sachdeva said. 

She added that there are a lot of concerns about the faltering global economic backdrop, but domestic equities are cruising higher amid improving risk sentiments which supports an appreciation bias for Rupee, besides, stable oil prices are further aiding the outlook for the domestic currency.  

According to PTI report, Chief Economic Advisor V Anantha Nageswaran said on Tuesday that India is not defending the rupee and the Reserve Bank of India is taking necessary steps to ensure that the movement of the rupee is gradual and in line with market trends. 

"India is not defending the rupee... I don't think Indian fundamentals are such that we need to defend the rupee. The rupee can take care of itself," Nageswaran said.