Indian Rupee trades lower tracking weakness in Euro - ICICI Bank Global Markets

The Indian Rupee traded lower today tracking weakness in the Euro. Although sharp decline in WPI inflation and gains in domestic stocks provided some support to the Rupee, pushing it to an intraday high of 54.55, political uncertainty and rising speculation of an early election in some quarters kept gains under check. Strong Dollar demand by oil importers further weighed on the Rupee and dragged it below yesterday's close. USD/INR ended the day at 54.81, compared to yesterday's close of 54.73.

The 6 and 12-month forward premia closed at 6.30% and 6.10% respectively as against 6.45% and 6.24% yesterday.

The Dollar gained amidst speculation over scaling back of Fed's asset purchases following comments by Fed official Plosser hinting at the same. The Euro traded lower after German ZEW survey index (current situation) fell to 8.9 in May from 9.2 in the prior month, signalling weak consumer confidence in the region. The Pound extended yesterday's losses as RICS house price balance came in lower than expected. Markets await BoE's inflation report due tomorrow for further cues on the economic momentum. USDJPY cross reversed its gaining streak on profit booking, though still remaining above the psychological 100 mark. Dollar index is trading around 83.36 as against prior close of 83.27. EUR/USD is trading around 1.2957, lower than previous close of 1.2975; GBP/USD is trading around 1.5284 as against previous close of 1.5299. USD/JPY is trading around 101.61 compared to previous close of 101.82.

Source : Equity Bulls

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