The rupee is expected to open higher against the dollar, as the US employment data released late last week raised hopes for further steps to boost economic growth.
On Friday, the dollar closed weaker against peers, as the US unemployment rate for July rose to a five-month high. The dollar index, as measured against six major currencies, fell to 82.38 from 83.36 levels a day ago. The euro rose for the second week in a row and closed at $1.24.
Improvement in risk appetite across countries is expected to help the rupee, as investors expect central banks to deliver growth supportive measures soon. Traders expect the rupee to move in the range of 55.5-56.5 against the dollar this week. On Friday, the rupee closed at 55.76 per dollar, posting a 0.8 per cent depreciation over the previous week.
“We feel it will be too early to give a recovery call for the currency though the chances of any steep depreciation beyond the 58-level can be ruled out, bearing any unforeseen developments in the domestic and the external situation,”said Param Sarma, director and chief executive officer, NSP Treasury Risk Management Services.
Domestically, markets will watch out for growth in industrial activity data. The industrial production data for June will be released on August 10.
Also, high dollar demand from oil marketing companies may cap rupee gains.
