December 31, 2021 / 10:30 AM IST
Amit Pabari, MD at CR Forex Advisors
On the final day of the ‘Week’, ‘Month’ and a ‘Year’, the USDINR pair is expected to trade in the range between 74.20-74.70 amid thin trading activity due to the New year holiday. The bias for the pair has been negative over the last 11 days, probably due to RBI’s hawkish support, return of global traders for carry trade set up into Rupee, or due to strong recovery in the riskier assets like equities.
Global investors will return next week and resume working on their positions and will start decoding factors affecting the FX. Inflation, Fed hikes, energy crisis, oil prices, Chinese Authority’s stance over tech companies, EM flows, the resurgence of new variant and clashes between US-China, Russia-Ukraine, EU-UK could be the key themes from the global front.
While domestic themes could be the Union budget, state elections, India’s bond inclusion, RBI’s policy/action/intervention, trade data will remain in focus.
Thus, one can say that Rupee’s move in 2022 is likely to be an adventure ride. Overall we expect the USDINR pair to trade between 73.50 -77.00 in the first half of 2022 and 75 to 78.50 over the second half of the year.