Rupee To Decline Further On Dollar Gains; Continued FPI Outflow

The domestic currency as of writing this copy at around 2:39 pm traded soft at again below 78 at 78.01 per US dollar. As against the previous close of 78.08, rupee in trade today opened strong at 77.95. For the day, rupee's high is 78.04, while its low is 77.875.

Rupee To Decline Further On Dollar Gains; Continued FPI Outflow

In the previous week on June 15, 2022, we saw rupee plummeting to its all time low of 78.22 against the greenback. The depreciation in the domestic unit as against the dollar was largely on the back of a firmer dollar and sharp sell-off in Indian equities. Dollar index which last was down by a tad has been on a winning streak for long as recessionary fears continue to mount and the Fed in its latest outcome increased interest rates by a sharp quantum. Nevertheless, on the flip side, a decline in crude oil prices lent some relief to the currency.

In the views of Raj Deepak Singh -Analyst - F&O, Currency, and Commodities at ICICIdirect, rupee is seen to fall further this week to 78.7 amid rising dollar and continuing foreign fund outflows. "However, investors will remain vigilant ahead of existing home sales data. Existing home sales in the United States is expected to decline from 5.61M to 5.41M in another sign the housing market is cooling, as higher home prices and mortgage rates have reduced buyer activity. USDINR (June) as long as it sustains above 77.80 it may rise till 78.70 this week", Singh is quoted as saying in a leading dailies.

For Monday, the factors cited above will continue to impact the rupee. However, sharp downside may be prevented by falling crude oil prices. As long as USDINR (June) sustains above 78.00 it may rise further till 78.30 level.

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