Rupee to trade at around 54.80: Srinivasan MV, Senior consultant, Basix Forex & Financial Solutions

Srinivasan MV SENIOR CONSULTANT Basix Forex & Financial Solutions



The rupee fell sharply losing about 6.22% in a month. It also recorded an all-time low against the US dollar at 56.52 last week. Stress in global and domestic markets was visible due to the ongoing problems in Spain and Greece. As a result, investors hurried to get into the US dollar globally, in effect hitting emerging markets.

With investments falling and trade gap widening, the rupee is still in for trouble in the coming weeks. Half hearted measures by RBI might help curtail volatility, but the rupee’s level would be determined by fundamentals. The fall in crude oil prices to a seven-month low is a positive for the rupee in the medium term, though it would take some time for the markets to adjust.

Meanwhile, some amount of dollar weakness can be seen this week, both on technical factors and due to weak US fundamental data. It may help the rupee to trade at a little high of around 54.80.