INSUBCONTINENT EXCLUSIVE:
The rupee edged up against the US dollar
on Friday, extending its mild recovery to the third straight session
In morning trade, the rupee rose to as much as 67.18 against the US dollar, a level last seen three weeks ago
Gains in the rupee came a day after official data showed GDP growth rose a better-than-expected 7.7 per cent in January-March quarter
However, the rupee - which had last month dipped to as much as 18-month low of 68.42 against the dollar - is still down over 5 per cent so
With GDP data behind, analysts will now watch the Reserve Bank of India's next bi-monthly policy for cue.1
The strong GDP numbers has strengthened expectations that RBI could possibly go for rate hikes sooner than estimated
"In terms of RBI's outlook, we expect a rate hike soon
There's a 50 per cent chance of a rate hike happening in June," said Teresa John, economist at Nirmal Bang Institutional Equities.2
"The down move in crude prices seems to have halted for now and that could support USD-INR
The USD-INR pair is continuing its bearish momentum
But it has immediate support at 67.30 levels," forex advisory firm IFA Global said in a note.3
Crude oil prices had last month touched $80 per barrel, a level last seen in 2014
With crude oil being the largest item on India's import bill, the prices influence the rupee's movement against the US dollar
On the higher side, USD-INR has immediate resistance at around 67.55-67.60 levels, IFA Global added.4
"Rupee seems to have benefited from the easing on Brent crude from $80 levels," Salil Datar, CEO and executive director, Essel Finance VKC
