COM: Rupee falls against dollar after six days of gains
The partially convertible currency lost on the previous session, snapping its six days continuous rise, as the equity stocks weakened and dollar index rose nearing to its nine-month high. The dollar index strengthening along with the week-long prevailing Greece debt concerns outweigh the relative strength in rupee. Rupee traded in range of 46.175-46.3112 per dollar, to end the day at 46.2712 per dollar, losing close to 0.34% vis-à-vis the penultimate day’s close of 46.115.
The BSE stock index, Sensex lost 0.62% to end the day at 16327.8, while the MSCI Asia Pacific Index fell 0.5%. Moreover there have been minimal FII inflows in the country as against the outflows, as the foreign holdings of Indian shares fell by $2.3 billion from a record $74.5 billion reached on January 11.
The International Monetary Fund proposed to sell more gold in the market, pushing down bullion prices and commodity-linked currencies and thereby lending strength to dollar. Statement from the German Chancellor Angela Merkel, of not providing any aid to Greece to help the country cope with its fiscal deficit, pressurized euro to fell against dollar. The currency has suffered losses of around 10% from the yearly high of $1.51 levels. During the day dollar index was up by around 0.20% at 80.607 levels.
Fundamental Outlook:
The depreciation in currency is followed by reduce premium on the forward front as well. Moreover with the month end dollar demand approaching from oil refiners and importers, along with the budgetary concerns to prevail, rupee might showcase slight weakness in the short run. However the trend for long term still holds on bullish side. Moreover rising dollar is also short-run bearish trigger.
USD/INR-February futures:
The pair USD/INR February futures traded sideways to marginally higher on yesterdays trading session and after making a high of 46.3125, closed at 46.2725 levels. Nevertheless, bearish trend is still in progress as long as 46.4400 resistances hold. On the lower side supports are at 46.2400 then 46.1000 levels. Trading below the daily short term (10, 20) EMA suggesting a downside pair movements for the day. We expect pair to come down, if market sustains below 46.4400 levels.
