Rupee - Dec 4, 2020 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

The Indian Rupee appreciated against the U.S. Dollar supported by the weakness of the U.S. currency.

The Rupee ended at 73.80 to the dollar compared with 73.90 in the previous session.

The Rupee, in early trades, had appreciated to an intraday high of 73.75 on the back of a weak dollar and possibly foreign fund inflows into the domestic equity markets.

Additionally, a combination of optimism surrounding the Covid-19 vaccine and talks of a stimulus aid package also supported the domestic unit.

Meanwhile, RBI's monetary policy had very little impact on the currency this Friday.

The Reserve Bank of India's Monetary Policy Committee (MPC) has kept Repo Rate unchanged at 4%. The committee voted unanimously to hold rates steady.

It has maintained an "Accommodative" stance and said it will maintain the accommodative stance "for as long as necessary."

On the inflation side of things, RBI has projected the CPI inflation at 6.8% for Q3FY21 and projected CPI inflation at 5.8% for Q4FY21. For H1FY22, projected CPI inflation is seen at 5.2-4.6%. RBI has projected the GDP for H2FY21 is positive +0.1% for Q3 against -5.6% earlier and +0.7% for Q4 against +0.5% earlier.

The Dollar Index was lower in Friday afternoon trade, while most of the Asian currencies were strong against the Greenback and lent support.

The one-year forward premium was at 3.20 rupees against 3.18 rupees in the previous session.

Technically, the USDINR Spot pair has given a gap down where it traded below 50-Daily Moving Average at 73.85 levels and below will continue to trade downside support at 73.60-73.35 levels. However above 73.85 will resume upside momentum up to 74.02-74.15 levels.

The USDINR Spot pair is expected to trade in a range of 73.55-74.02 levels.

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Source : Equity Bulls

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