By Raj Deepak Singh
Rupee depreciated majorly last week on the back of strong dollar and retreat in domestic markets. Meanwhile, RBI interest rate hike by 50 bps restricted further downsides. Dollar index edged higher amid rise in US treasury yields and strong economic data from country. US economy added 390K payrolls in May above market forecasts of 325K. The latest reading left the economy 822K jobs or 0.5% below its pre-pandemic level, in a sign, that the labour market remains resilient and is getting close to full employment. Additionally, US trade deficit shrunk in April, the trade deficit in the US narrowed to a four-month low of $87.1 billion in April from a record of $107.7 billion in March and below market forecasts of a $89.5 billion.
For Monday, Rupee may continue with its depreciation mode amid strong dollar and persistent foreign funds outflows. Further, rupee may be pressurised by concerns over slower economic growth as RBI has lowered its growth forecast for FY 2022-23. As long as USDINR (June) sustains above 77.85 it may rise further till 78.15 level.
(Raj Deepak Singh is an Analyst – F&O, Currency, and Commodities at ICICIdirect. The views expressed are the author’s own. Please consult your financial advisor before investing)
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