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Indian Rupee: Likely To Stay In Narrow Range

Indian Rupee: Likely To Stay In Narrow Range

January 17, 2022 9:07 IST | capital market

The Indian rupee could continue to stay on side-lines in opening trades on Monday, 17 January 2022 as dollar holds on to weekend gains as investors look forward to US Feds January meeting. The greenback witnessed a big jump on Friday along with treasury yields from hawkish rates outlook. Besides, sustained foreign fund outflows from Indian markets and higher crude prices could also weigh down the local unit.

On Friday, rupee snapped its five-day winning streak and tumbled by 25 paise to close at 74.15 against the US dollar, in line with other emerging market currencies. At the interbank foreign exchange market, the local currency witnessed an intra-day high of 74.05 and a low of 74.21 against the US dollar. It finally settled at 74.15, down 25 paise over its previous close of 73.90.

Domestic indices ended almost flat with negative bias on Friday. The barometer index, the S&P BSE Sensex, fell 12.27 points or 0.02% at 61,223.03. The Nifty 50 index declined 2.05 points or 0.01% at 18,255.75. Foreign portfolio investors (FPIs) sold shares worth Rs 1,598.20 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 371.41 crore in the Indian equity market on 14 January, provisional data showed. Overseas, Asian stocks are trading mixed on Monday after release of Chinese economic data.

US markets will remain closed today for Martin Luther King Jr. Day. US stocks ended mixed Friday after sentiment on Wall Street appeared to sour on heightened anticipation for higher interest rates and concerns over the economic outlook. New York Fed President John Williams, a key ally of Fed Chairman Jerome Powell, said Friday that he expects economic growth to slow in 2022 to a 3.5% annual rate, from an estimated 5.5% rate last year, on the spread of omicron.

Meanwhile, the US dollar index, which declined sharply last week until Fridays leap, sat at 95.18 in early Asia on Monday. US Fed policymakers signalled they will start to raise interest rates in March to combat sky-high inflation.

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