Mumbai, Jul 8:After losing most of the initial gains in last few trading sessions, the rupee is likely to trade in the 54.50-55.30 range this week due to renewed risk aversion globally after more stimuli by three leading central banks last week, according to experts.
“The rupee is likely to trade in range of 54.50-55.30 this week with an appreciating bias,” IDBI treasury head N S Venkatesh told PTI.
The FII inflows and policy announcements will be crucial to provide direction to the rupee, he said.
Falling for the third day in a row, the domestic currency on Friday lost 45 paise to end at 55.42 despite reported RBI intervention, as demand for the dollar rose following signs of deepening global uncertainties.
Last week, the Chinese, European and British central banks announced more monetary steps to stimulate their economies, creating apprehensions about the growth prospects of the global economy.
The concerted move had also prompted risk aversion attitude in investors, helping the dollar to strengthen against all major currencies.
“While risk aversion is likely to persist, any monetary easing measure will trigger the rupee movement,” currency strategist at Geojit Comtrade Hemal Doshi said.
On trading range this week, the rupee is likely to hover between 54.50-55.70 to the dollar and announcement of any policy measure will help it appreciate, he said.
“After the initial positive sentiment, the government needs to come up with some concrete policy measures, which will support the rupee,” Doshi added.
Meanwhile, Standard Chartered had last Friday upgraded its short-term rating for the rupee to “neutral” from “underweight”, and also revised its end-September forecast to 56 from previous forecast of 57.50 on Friday.
It pointed out that the currency in REER (real effective exchange rate) terms is only 3 percent below the average of the past decade and cited risks from growth and current account deficits.
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