The rupee weakened by 16 paise to open at 94.90 against the US dollar on Wednesday, 24 June, as the greenback climbed to its highest level in more than a year amid growing expectations of a Federal Reserve rate hike and renewed safe-haven demand.
The domestic currency’s recent recovery, supported by easing crude oil prices and measures announced by the Reserve Bank of India (RBI), has lost momentum this week as markets increasingly price in a Fed rate increase at its September policy meeting.
The US Federal Reserve adopted a notably hawkish stance at its latest policy meeting, prompting several analysts to revise their interest rate forecasts. Expectations have shifted from no further tightening to the possibility of one or even two rate hikes before the end of the year.
Despite a sharp decline in crude oil prices, the rupee has remained under pressure. Market sentiment has improved amid global energy supply concerns, with reports indicating that more oil tankers stranded in the Gulf region are preparing to transit through the Strait of Hormuz.
Brent crude futures were trading below $77 per barrel, extending their monthly decline to nearly 16.5%, offering some support to oil-importing economies such as India.
Rupee Outlook
Kaveri More, Technical Commodity Analyst, said that the rupee opened weaker at 94.80 against the US dollar on Wednesday, extending its losing streak for a third consecutive session as the greenback remained broadly firm.
According to More, the USD/INR pair is likely to retain a bullish bias in the near term, with persistent importer demand and dollar buying continuing to outweigh selective exporter-related supply. She noted that a sustained move above the 95 mark could pave the way for further upside towards 95.50 and subsequently 96.00.
On the downside, immediate support is placed in the 94.00-94.10 zone. More added that the rupee’s near-term trajectory will be influenced by broader dollar sentiment, crude oil price movements, foreign portfolio flows, and the Reserve Bank of India’s interventions, which are helping contain volatility.
“For now, market sentiment remains cautious, and any dips in the dollar-rupee pair are likely to attract fresh long-dollar positions,” she said.
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