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On flipside, 77.40-50 zone will act as a crucial short-term support.” If it convincingly trades above this level then further move towards 78-78.10 can be expected. Overall, the pair is expected to face resistance near 77.80-85 levels. Against this backdrop, RBI’s approach could suppress the aggressive volatility and rates. “In nutshell, higher than expected US inflation could again send US yields higher, equities lower and the US dollar higher against the DM and EM currencies. The focus turns towards today’s US CPI data as recently energy prices in the US have been again on a bullish ride.” The question remains with us- until when RBI will be able to control the Rupee against the weaker fundamentals? Today, the Rupee is about to open near a record low of 77.80 and is expected to trade in a range of 77.60 to 78.00 with a weakening bias. Fortunately, RBI managed to protect from a sharp slide. “On Thursday, the local currency was seen tumbling to an all-time low against USD around 77.81 after Adani’s outflow was heard over the street. Nifty holds 17350 after RBI MPC hikes repo rate, charts show indecisiveness rally possible on 17500 breakout Amit Pabari, MD, CR Forex Advisors Next week, focus will be on the FOMC policy statement and that is likely to trigger further volatility for the dollar that has been gaining strength steadily. We expect the USDINR(Spot) to trade with a positive bias and quote in the range of 77.40 and 78.20.” Broader gains in the dollar have been ahead of inflation data that will be released from the US later today.
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Earlier this week, the RBI decided to raise rates and dropped its “accommodative” stance, signalling stricter tightening ahead to fight soaring inflation. “Dollar consolidated in a narrow range despite gains in domestic equities and broader gains in the dollar against its major crosses. Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services At the interbank foreign exchange market, the local unit opened lower at 77.74 against the greenback and touched an all-time low of 77.81 intraday before it finally settled at 77.76, down 8 paise over its previous close. In the previous session, rupee depreciated against the US dollar, weighed down by elevated crude oil prices and persistent foreign capital outflows. We expect US$INR to trade in the range of 77.80 to 78.00,” the brokerage said. “US$INR is expected to continue its upward trend and break its key resistance level of 77.95. However, investors will remain vigilant ahead of US CPI data, which could provide clues on the future path of monetary policy tightening, according to ICICI Direct. The rupee is expected to depreciate on Friday amid strong dollar.