Rupee rises 7 paise against the US dollar; all eyes on GDP data
“For the day, we expect volatility for the rupee to be confined to a narrow range of 75.40 and 76.20,” MOSL said.
by ETMarkets.com
Mumbai: India rupee rose 7 paise in early trade, in sync with firm Asian peers, but trade was cautious ahead of key March quarter GDP data due later in the day
At 10:10 am, the rupee was up 7 paise or 0.10 per cent at 75.68 against the US dollar. It opened at 75.70 compared with the previous close of 75.7612. The Indian unit is up 6.03 per cent for the year to date.
Motilal Oswal Securities pointed that rupee continued to consolidate in a narrow range for the whole of this week despite volatility in domestic equities and as market participants remained cautious ahead of important growth number that will be released today.
As India nears the end of the fourth phase of lockdown, economists are wondering what's the cost of nation-wide lockdown that has been in place since March 25.
To be sure, India's growth was already lying at a six year low during the pre-lockdown period. In that context, today's March quarter GDP figure might be helpful.
As per SBI's research team, the cost of lockdown for the seven days of March may cost India Rs 1.4 lakh crore, which it says may drag India's GDP for FY20 to 4.2 per cent from 5 per cent estimated earlier.
“Expectation is that the number could disappoint and that could keep the rupee weigh down against the US dollar. In the recent past, statements from the US President hint towards the US taking action against China is disturbing the overall market sentiment.,” it said.
“For the day, we expect volatility for the rupee to be confined to a narrow range of 75.40 and 76.20,” it added.
Dollar remained under pressure against its major crosses after data showed the US economy shrank at an even faster pace than initially estimated in the first three months of this year.
The world’s largest economy fell at an annual rate of 5 per cent in the first quarter, a bigger decline than the 4.8 per cent drop first estimated a month ago. At the same time, pending home sales fell a steeper-than-expected 21.8 per cent in April as compared to the previous month.
The greenback is likely to get a trigger from any update on the Hong Kong issue that is creating friction between the two powerful nations.