By Rohit Vaid
Mumbai, Jan 15 (SocialNews.XYZ) Rising trade deficit along with prospects of a rate hike by the US Fed is expected to subdue the Indian rupee during the upcoming week.
Accordingly, the rupee is expected to range from 73.80-74.70 to a USD.
Last week, rupee had closed at Rs 74.14 to a USD before hitting a low of 73.70.
"Rising trade deficits of $21.7 billion for December should keep rupee under pressure," said Sajal Gupta, Head, Forex and Rates at Edelweiss Securities.
"Besides, US Fed's commentary of rate hikes in 2022 shall also be a dampner for rupee and other EM currencies. Lesser number of IPOs in the coming fortnight can also be a factor for rupee weakness ahead," Gupta added.
Notably, a rate hike by the US Fed can potentially drive away FIIs from India and other emerging markets.
On the trade front, deficit widened by 37.92 per cent on a year-on-year basis to $21.68 billion in December 2021 from $15.72 billion in the like period of 2020.
It had widened to $12.49 billion in December 2019.
"India rupee has become the worst performing currency among Asian basket amidst back of surging trade deficit and inflation," said Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities.
"Rupee is having strong support around 73.80 while resistance will be in the range of 74.40 to 74.70," Vakil added.
According to Gaurang Somaiya, forex and bullion analyst, Motilal Oswal Financial Services: "At the start of the week, China's GDP number is scheduled to be released and that could set the tone for the week.
"We expect the momentum for the USDINR would continue to remain positive and it could quote in the range of 73.70 and 74.50."
(Rohit Vaid can be contacted at rohit.v@ians.in)
Source: IANS
About Gopi
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz