ICICI Direct's currency report on USDINR
Rupee depreciated yesterday amid month end dollar demand from importers and FII outflows. Meanwhile, sharp fall in rupee was prevented due to decline in crude oil prices and as dollar hovered near 5-month low after PCE price index data showed annual US inflation slowed further below 3% in November. Rupee is likely to appreciate today amid soft dollar and decline in US treasury yields. Yields nosedive as recent inflation data bolstered expectations that US Federal Reserve will start cutting rates next year as soon as March. Additionally, improved economic data, optimistic domestic market sentiments and softening of crude oil prices will aid rupee. India’s CAD narrowed to 1% of GDP in Q2 FY24 down from 1.1% in preceding quarter and 3.8% a year ago. USDINR Jan may slip towards 83.15 level as long as its stays below 83.40 level.
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