The Indian rupee is expected to depreciate further on Wednesday amid a strong dollar and risk aversion in global markets. Additionally, continued FII outflows and widening current account deficit will hurt the rupee. Market participants will keep an eye on the FOMC meeting minutes. The US Dollar INR (July) is expected to trade in a range of 79.20-79.65, according to ICICI Direct. In the previous session, the rupee depreciated to a new low of 79.37 against the dollar after the government reported a record trade deficit of $25.6 billion for June. The local unit opened weakly and traded at 79.09 early in the day before slipping to an all-time low of 79.37 at the close after the dollar gained against other currencies including the euro . The rupiah closed at the low of the day, losing 42 paise from Monday’s close at 78.95.

Anindya Banerjee, Vice President, Currency and Interest Rate Derivatives at Kotak Securities

“USDINR spot closed at a new all-time high at 79.37, up 42 paise on the spot. A sell-off in EURUSD on recession fears sparked a risk aversion trend on the markets. global equities A double whammy of weak equities and a strong US dollar index caused the rupiah to depreciate against the US dollar The low futures premium and offshore derivatives quoted at a premium to onshore are signs of the unwinding of the carry trade, which is a major headwind for the Rupee.In the near term, we expect USDINR to trade with an upward bias, within a range of 79, 00 to 79.80 cash.

Sugandha Sachdeva, Vice President – Commodities and Currency Research, Religare Broking

“The Indian rupee fell to a new high of 79.37 against the dollar, depreciating around 0.50% following a rise in the dollar index to a new twenty-year high. , strong portfolio outflows, soaring crude oil prices and a rise in major central banks’ interest rate regimes were the main catalysts for this recent bout of weakness in the rupee-dollar exchange rate. Domestically, India’s trade deficit hit a record high of $25.63 billion in June amid high commodity prices, pushing up import bills. is expected to widen to around 2.9% of GDP in FY23 from 1.2% in FY22, weighing on the national currency Going forward, we expect the Indian Rupee to will head towards the 80-81 zone against the USD, although the RBI is expected to intervene d proactively in the markets to curb the rate of decline of the national currency.

Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services

“The rupee fell to new all-time lows as fears of a wider current account deficit came to the fore after the country’s trade deficit hit a record high in June. Equity FII outflows in the month of June were $6.6 billion, the highest since March 2020, bringing total outflows so far in 2022 to more than $30 billion. The dollar rose sharply against its major crosses on safe haven buying amid fears of rising recession fears. Yields on US Treasuries fell to one-month lows and a key part of the yield curve inverted for the first time in three weeks as economic worries dented appetite for risk. This week, the focus will be on minutes from the US Federal Reserve and European Central Bank of their latest policy meetings, as well as US payrolls figures for June, due Friday. We expect the USDINR (Spot) to trade with a positive bias and quote in the range of 79.05 and 79.80.

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