New Delhi, July 7: After falling for ninth consecutive week against dollar, rupee is likely to remain under pressure this week as well as better-than-expected job growth data makes the case stronger for the US Fed to taper its monetary easing programme earlier than expected, say experts. "Job growth data from US is likely to put pressure on the rupee on Monday as the dollar is likely to strengthen against all major currencies.
As an immediate reaction, rupee may further depreciate due to this," P Paramasivam, general manager who looks after treasury operations, at Corporation Bank told PTI. He, however, said the rupee is likely to pull back from the possible lows in the remaining trading sessions. On Friday, US job growth data showed that 1.95 lakh new jobs were created in June, which was above market expectations.
US Fed chairman Ben Bernanke had in mid-June said he would taper USD 85 billion worth monthly liquidity infusion by the end of the year if economic data is upto the central bank's expectations, sending global currencies down. The rupee was the worst performer among the Asian units losing 8.6 per cent in the April-June quarter. According to analysts, encouraging job data from US may prompt the US central bank to taper its stimulus programme, which would result in foreign institutional investors pulling out from emerging markets.
"The rupee will take cue from the job data arising out of US for June. The direction of the domestic currency will depend on the opening on Monday," chief currency strategist at Geojit Comtrade Hemal Doshi said. As far as the technical side is concerned, if rupee breaches 59.90 this week, it is likely to appreciate from the lows going forward, Doshi added. On Friday, rupee closed at 60.22 to the dollar on fresh demand of greenback from importers even as RBI had reportedly intervened to arrest the slide in the local currency.
On June 26, the rupee closed at life-time low at 60.72 after touching 60.76 earlier in the day against dollar. Last week, RBI Governor D Subbarao had said the central bank had no exchange rate target in mind but would use all the instruments to reduce volatility in the currency.
