With the ongoing weakness in the dollar, the rupee is unlikely to breach 65.50-66 levels against the US dollar, says a report.
Despite a rate hike from the Federal Reserve, the US dollar index declined yesterday on account of weaker-than- expected retail sales and CPI data, said the report of HDFC Bank's Treasury Research Team.
"With the ongoing weakness in the dollar, we do not expect the rupee to breach 65.50-66.00 levels this year," it said.
The rupee today took a hefty knock by plunging 23 paise to a two-week low of 64.53 a dollar after the US Fed delivered the widely expected rate hike and maintained a hawkish tone going forward.
The report said the appreciation scenario for the rupee, which it had earlier anticipated to begin by end of this year could initialize much earlier.
"We are in the process of firming up this view and will shortly communicate our new forecasts," the report added.
The US Fed increased its policy rate by 25 bps to a range of 1- 1.25 per cent.
"This was completely in sync with market expectations and thus did not produce any surprising responses," the report said.