The Indian rupee held its ground against the US dollar on Tuesday amidst noisy equity markets and expectations of interest rate hike in the Reserve Bank monetary policy review later during the month. Foreign investors continued to be net sellers in the stock markets, recording 2.9.75 million dollars on Tuesday as interest rate hike fears remained in the markets. The partially convertible rupee closed at 45.1625/1725 per dollar, after hitting 45.16, its strongest since Jan. 5. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange closed at 45.3150, 45.32 and 45.3150 respectively.
The European currency did tick up against its American counterpart this week following comments from Japan. The Japanese said that they have plans to buy one fifth of the bonds issued later this month. However, the bond auctions in Portugal looms over the market, keeping the upside in Euro limited. EUR/USD traded with a low of 1.2903 and a high of 1.2995 before closing at 1.2985
OUTLOOK
USDINR Jan: The market has opened below the yesterday’s support of 45.30, which has turned into an intraday resistance. The market is expected to extend the weakness towards the next support of 45.10. However, a break above 45.30 can take the market higher further. Resistance lies at 45.45.
EURINR Jan: The EURUSD saw slight recovery against the US dollar and is likely derive strength in the EURINR pair. EURINR is expected to stage a recovery towards the resistance at 59.60 levels, which is likely to prove a tough resistance to break. If EURUSD manages to maintain its strength, there will be some more buying in the EURINR pair
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