The rupee is currently trading at 83.56 per dollar, close to its all-time closing low of 83.57, which it hit on Tuesday. The forex market is awaiting today’s US May CPI print and the Fed rate decision.
IFA Global, in a report, said US headline and core CPI prints are expected to be 3.4 per cent and 3.5 per cent year-on-year, respectively.
“While the Fed is expected to leave rates unchanged, the dot plot, economic projections and tone of the press conference will be closely followed for any hints on the timing of rate cuts. Markets are currently pricing in a 85 per cent chance of at most two rate cuts in 2024,” it said.
The firm, which provides forex, treasury and wealth management solutions, assessed that the rupee is likely to open around 83.59 and trade in the 83.40-83.65 range intraday.
“We may see some intervention close to all time lows, especially ahead of key events like US CPI and the Fed rate decision,” it said.
Amit Pabari, Managing Director, CR Forex Advisors, said the Reserve Bank of India, armed with substantial reserves of $651 billion, stands ready to intervene to prevent significant rupee depreciation.
Additionally, joining the inflows queue —such as the State Bank of India raising $3 billion and Union Bank of India raising $1.20 billion through QIPs and bonds are likely to bolster the rupee. Given these factors, the rupee is forecast to oscillate within a range of 82.90 to 83.70, Pabari said.