Rupee may weaken to 53.50 a dollar: Jigar Pandit, Sharekhan

By Jigar Pandit

The outlook remains week, we see the rupee moving to 53.50-54 per dollar. On the downside, we don’t see it will break 50.30 per dollar level. On the upper side, we see prices to go up to-53.6 per dollar.

The way crude oil prices are going up, our trade deficit could likely go up in the coming weeks. With the import bill also rising, we could see the rupee falling further. In that scenario we see, the rupee will depreciate to 53.50 per dollar. Also, outflow of the money-dollar will go out of the country.

The rupee has fallen by almost 15% in the last three months. Any movement or development in the Euro zone would lead to dollar strengthening, which will lead to investments moving into safer currencies like dollar. If that becomes the trend, we would see dollar outflow from the country, which in turn will result in the rupee depreciating further.

Euro will be range bound. After Friday’s meeting where some of the European countries have agreed to bail out with proper revised strategies to bail out the other European countries. We will see the euro range bound till something more concrete is heard from the euro zone. If positive developments happen there, the euro might strengthen against the dollar.

(The author is Assistant Vice-President, Sharekhan)