Rupee rises 13 paise today: Why analysts believe domestic currency may appreciate further this week? Check triggers

Amid the positive equity market and weak US dollar, the Indian Rupee appreciated by 13 paise to 82.62 against the American currency on Monday. This appreciation is likely to continue with the domestic currency reclaiming 82.3 levels against the dollar this week, an analyst at ICICI Securities estimated.

According to Pankaj Pandey, Head – Research, ICICI Securities, “The rupee is likely to face a strong resistance near 83.30 levels in this week and may regain its strength till 82.30 levels amid weakness in the dollar and softening of crude oil prices.”

He added that the Dollar Index may face a strong resistance near 105.30 levels and slip back to 103 levels as Fed slowed down its pace of rate hike and downgraded its growth outlook sharply for 2023.

The US Federal Reserve last week raised its benchmark rate by 50 basis points (bps) as expected but signalled plans to lift rates next year.

“We expect Fed funds rate to peak at 5 per cent in the first quarter as it takes time for the full effects of those increases to ripple through the economy,” Pandey said in its comment on Rupee.

"The Indian rupee appreciated along with most regional currencies following the unwinding of the dollar. The dollar index, a basket of six currencies, also fell half a percentage point after last week's rebound.

"Looking across asset markets the investor mood seems to be calm ahead of the Christmas holiday. Forex market volatility remains subdued while the risk-assets recovers after the previous week's sell-off," Dilip Parmar, Research Analyst, HDFC Securities, said.

Back home, spot USD/INR is expected to consolidate in the range of 82.40 to 83. The bullish trend will get negated only below 82.10 while the crossing of 83.25 leads to panic buying, Parmar added.

On the domestic equity market front, the BSE Sensex ended 468.38 points or 0.76 per cent higher at 61,806.19, while the broader NSE Nifty advanced 151.45 points or 0.83 per cent to 18,420.45.

Brent crude futures, the global oil benchmark, advanced 1.10 per cent to USD 79.91 per barrel. Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday as they offloaded shares worth Rs 538.10 crore, according to exchange data.

With PTI Inputs