After a strong start the Indian rupee has pared all its gain and it is trading flat at 70.69 per dollar versus Thursday’s close 70.67.
During the day it touched a level of 70.30 per dollar.
Rahul Kalantri, VP Commodities at Mehta Commodities believes that the rupee may not slip further in the coming days. There is a major support of USDINR at 69.40 and it will respect this level and bounce back to the levels of 71.80 and 72.56.
INR has underperformed most of its EM peers in the last six months. This underperformance can be attributed to a concoction of worsening
global and domestic factors.
Next three months will see a lot of event-driven uncertainty for the currency. Starting with upcoming OPEC and RBI policy meet in the first
week of December, followed by US Fed meet and locally state election and union budget next year, he added.
Oil prices slumped up to nearly 8 percent to the lowest in more than a year on Friday, posting the seventh consecutive weekly loss, amid intensifying fears of a supply glut even as major producers consider cutting output. In the recent past, increased supply of oil by US producers but expectation of trimming supply by OPEC nations in the scheduled meeting kept losses restricted for the commodity. On the domestic front, India’s central bank continued to intervene to restrict major volatility for the currency, said Motilal Oswal.
Latest data for the week ended Nov 16 showed reserves increased by USD 568.9 million to USD 393.58 billion suggesting that the central bank is building up its reserves at lower levels. Today, USD-INR pair is expected to quote in the range of 70.20 and 70.80, it added.
Source : http://tiny.cc/m1980y