Currency Outlook Next Week: Rupee May Stay Under Pressure

Global Markets tumbled this week as Russian President Vladimir Putin ordered the invasion of Ukraine early morning on Thursday. The SPOT USDINR pair shot up to hit a high of 75.82 a level that was seen in Dec, 2021. Kyiv reported columns of Russian troops pouring across the borders with Russia and Belarus stretching from the north and east, and landing on the coasts from the Black Sea in the southwest. U.S. President Joe Biden called the Russian action an "unprovoked and unjustified attack". All major nations condemned Russia's act and said that it was a blatant violation on international laws.

The US was quick to impose fresh sanctions on Russian Banks and also cut-off more than half of Russia's high-tech imports.The EU commission bloc said that it would impose a new round of sanctions that would hit Russia's economy severely. The UK was also imposed largest ever sanctions on Russia.

The markets managed to erase its losses after US President Joe Biden reiterated that US forces will not fight in Ukraine. Brent Crude oil prices also shot up to hit multi-year highs of Prices hit 105.74$ per barrel before retracing. We expect the SPOT USDINR pair to trade under pressure and test 76-76.25 levels during the coming week. Levels around 75 are crucial support which if broken will trigger a correction towards 74.60 levels in the pair.

(The above is a perspective note on Rupee from the Currency Desk of Emkay Global Financial Services)