Rupee Vs Dollar: USDINR futures expected to trade sideways on Thursday; experts suggest strategy on 27 May futures

A weaker-than-expected economic data could keep the currency weighed down on Thursday, brokerage firm Motilal Oswal said in its report. For today, it expect USDINR (Spot) to trade sideways with a positive bias and quote in the range of 77.20 and 77.80.

Today, 27 May USDINR futures were trading positively at 77.64 in the early trading session and were up 0.3 per cent or 23 paise from the previous closing price of 77.41.

Trading Strategy: Motilal Oswal recommends a Sell in 27 May USDINR futures at 76.50 PE. It also suggests Sell on 27 May EURINR futures while a buy on GBPINR futures.

Rupee traded in a narrow range after falling to fresh all-time lows earlier this week. “On the domestic front, market participants remained cautious ahead of the important inflation number that will be released today,” the report said.

Expectation is that the number could come in higher and quote above the 7 per cent mark following rise in food and energy prices, the report noted.

Apart from inflation, industrial production number too will be released and is likely to influence the rupee, it further said.

On Wednesday, the dollar continued to rally against its major crosses after the US CPI for April came in at 8.3 per cent, higher than the 8.1 per cent estimate but below 8.5 per cent the prior month. Major crosses Euro and pound came under pressure and in today’s session are likely to take cues from the UK GDP number, the report said.

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The Indian rupee see-sawed between gains and losses on Wednesday, Praveen Singh, Assistant Vice President (AVP), Fundamental Currencies and Commodities Ananlyst at Sharekhan by BNP Paribhas said.

It was on the back of US 10-year yields pulling back below 3 per cent mark, he added.

“Risk sentiments are positive as China registered fewer Covid cases. Shanghai reported 51% lower cases yesterday, which has made investors somewhat hopeful about a possibility of easing lockdowns in China.,” Singh said.

“There are reports of RBI intervention in the futures markets, too. Decline in crude oil prices over the past couple of sessions has also lent support to Rupee at lower levels. Dollar eased from higher levels on positive Asian and European markets and a decline in US Treasury yields. However, risk aversion in domestic markets and sustained FII outflows are capping sharp gains in the domestic currency. FIIs remained net sellers for the seventh consecutive session on Tuesday and sold assets worth about Rs. 3960 crores. Net FII outflows in the month of May stands at Rs 20,055 crore,” he added.

The domestic currency is expected to trade sideways to lower on sustained FII outflows amid hawkish US Federal Reserve and concerns over global economic slowdown, though recent decline in crude oil prices and further intervention by the RBI may support Rupee at lower levels.

Rupee may trade in the range of 76.50-78.20 in next couple of sessions, he opined.

Meanwhile, another analyst Anuj Gupta recommends a Buy in 27 May USDINR futures at Rs 77.30 with a stop loss of Rs 77 and target of Rs 77.80. He said that Rupee is expected to trade lower against the greenback in the near to immediate term.

Gupta, who is Vice President (VP), Commodity and Currency Research at IIFL Securities sees support at 77.20/77 while resistance at 77.60/77.90 and expects a sideways movement today.

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)