After a firm stint on Monday on the back of the weak U.S. employment data, Rupee is again witnessing pressure today. Against the closing level of 60.29/30, the rupee went to report losses around 60.52/53. The drop in rupee comes on the back of dried up sell of dollars by the corporates combined with buying activity of the greenback by the public banks. Also, the revival of hopes that the Federal Reserve will keep its schedule of hiking interest rates before time has weighed down on INR today.
US Strong Globally
The US dollar traded at a 14-month high against a basket of major global currencies after the U.S. data projected that jobless claims diminished and retail sales improved in the U.S. during last month. This has turned the U.S. investors optimistic that the Fed could roll back stimulus and hike interest rates ahea of its schedule. An increase in the interest rates impact currencies globally as it will take away the attractiveness of higher-yielding assets in emerging markets. According to Kotak Securities, rupee is suffering from a strengthining dollar globally, but the research team are of view that INR has strong support from the foreign inflows as well as an outperforming domestic stock market.
At the same time, the research firm, Bank of America is of view that rupee is likely to trade within a range of 58-62 in the upcoming months. The softening of global oil prices coupled with curtail on gold imports should support rupee, according to the research firm.Meanwhile, RBI Governor, Raghuram Rajan has said that the central bank is making arrangements to counter the effects of rate hike by the US Federal government. He added that RBI is trying to maintain an adequalte level of foreign reserve to manage the impacts of rate hike by the Fed. Traders are projecting resistance at 60.55 for rupee during today's session.