18.05.201608:25:00UTC+00Indian Rupee Likely to Depreciate on fED Rate Hike Expectations

The INR is expected to depreciate further after hawkish comments made by the Federal Reserve members. The value of rupee has depreciated to 0.17% and is likely to see further depreciation in the coming months, where it is likely to decline further.

 Dollar closed at 66.725 per dollar at 0.1 %yesterday.  Rupee hits two months low at 66.95 today morning compared to previous close of 66.87.

Federal bank’s Williams and Lockhart said that there will be a 2-3 hikes this year. Overall rupee movement will be dominated by the global cues and the timing of the fed interest rate hike. Inflation has also increased to 5.39% accelerating from a 4.83% rise in the previous month; inflation is further likely to go up in the month of June to 5.5 %. Moreover the monsoon for this year is said to be one week in delay which will have impact on the consumer price goods.

Technicals:

US Dollar index has surged till 94.99 at the time of writing after making a low of 94.32 yesterday and it is currently trading at 94.76. The DXY major resistant at 95(55 day EMA) and any break above will take the par till a 95.35 /96 level.

USD/INR has broken the minor resistance 66.85 jumped till 67. Minor weakness can be seen only below 66.70. Major resistance is Around 67.10 and break above targets 67.50.