Currency market observers expect the Indian rupee to remain stable, even as global and domestic uncertainties loom large on the economy.
The Indian rupee appreciated by 19 paise to 66.43 against a US dollar from its previous close of 66.62 to a greenback.
“After witnessing almost flat opening, USD/INR traded firm on buying support and witnessed a gain of around 0.27 points from yesterday’s closing,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.
“However, it faced a heavy selling pressure from day’s high and traded down. It witnessed heavy selling pressure in the second half of the session.”
Astha Jain, Senior Research Analyst at Hem Securities, said that the Indian rupee traded at a range of 50-60 paise in the futures market on Wednesday.
“Largely, we are expecting the dollar to fall further as Donald Trump won the US presidential election, and the rupee is expected to rise in the long term due to Modi’s reform measure,” Jain told IANS.
According to Bansi Madhavani, analyst at India Ratings and Research, investors will now focus on the government’s agenda and strategy, as also on macro-economic data impacting US Federal Reserve’s rate normalisation decision.
“In case of tempered down expectations of near term hike in favour of more gradual normalisation, impact on few resilient currencies like rupee will be cushioned, despite the overall risk-off environment,” Madhavani said.
“Additionally, as initial panic reaction subsides, high yield debt markets and correction in equity markets could encourage foreign investors’ flows into domestic markets. The rupee is, therefore, likely to stay anchored in the overall emerging market space,” he added.