Rupee - Currency Update - Dec 8, 2020 - Reliance Securities

The Indian Rupee depreciated against the U.S. currency due to likely intervention from the Reserve Bank of India and sharp rebound of the U.S. Dollar Index in this Monday afternoon trade.

The local unit initially was strong against the U.S. Dollar supported by hefty foreign equity inflows.

The Rupee ended at 73.90 to the dollar compared with 73.80 in the previous session. The currency's day high was 73.70 and the day's low was 73.96.

Meanwhile, Asian currencies were broadly lower and also weighed on sentiments this Monday.

The one-year forward premium was at 3.21 rupees against 3.20 rupees in the previous session.

The benchmark BSE Sensex and the broader NSE index ended at record highs and gained 0.77% and 0.73%, respectively on Monday.

The benchmark 5.77% bond maturing in 2030 ended at 98.87 rupees, yielding 5.92%, against 99.06 rupees, yielding 5.90%, on Friday.

FPI ACTIVITY

FPI bought net $403.27 million as on 04 December 2020.

The data presented below constitutes trades conducted by FPIs/FIIs upto the previous trading day.

For the month of December, FPI were net buyers of a total of $1.691 billion.

Since the month of March 2020 FPI were net buyers of a total of $6.581 billion.

The Dollar gave up most of the gains against most currencies on Monday in choppy trading, as investors looked past the surge in coronavirus cases and ahead to a possible new COVID-19 U.S. stimulus deal and vaccines to fight the pandemic.

The Euro ended lower against the U.S. Dollar on Monday despite broad Greenback weakness.

The Sterling, meanwhile, slumped against the U.S. Dollar on Monday after Britain and the European Union said on Monday conditions for a Brexit trade deal were not there.

The Japanese Yen ended flat against the U.S. Dollar on Monday.

OUTLOOK - DOMESTIC & INTERNATIONAL CURRENCY

The Indian Rupee could start this Monday on a slightly weaker note against the U.S. Dollar as risk appetite waned amid rise in covid-19 cases and restrictions globally.

RBI's presence in the market and a recovery of the Greenback could also keep appreciation bias limited.

Asian currencies have started weaker this Tuesday morning and could weigh on sentiments.

The Rupee could likely open around 73.95-93.97 per dollar compared with 73.90 at close on Monday.

Meanwhile, NDF is at 73.80/81 this Tuesday morning vs a close of 73.76 on Monday.

Technically, the USDINR Spot pair is trading near the 50-Daily Moving Average at 73.85 levels below which will continue to trade downside support at 73.60-73.35 levels.

However above 73.87 will resume upside momentum up to 74.02-74.15 levels.

The USDINR Spot pair is expected to trade in a range of 73.60-74.15 levels.

US Dollar Index was marginally higher this Tuesday morning in Asian trade as rise covid-19 cases offset optimism about vaccinations and fiscal support for the U.S. economy.

The Euro and the Sterling were trading flat to lower against the U.S. Dollar this Tuesday morning in Asian trade.

Markets will look to cues from a meeting between British Prime Minister Boris Johnston and European Commission President Ursula von der Leyen on the Brexit trade deal negotiations.

Later business sentiment surveys in Germany are due and will offer some sense of how deeply the latest wave of COVID-19 has hurt consumers' mood in Europe.

The Japanese Yen was flat against the U.S. Dollar this Tuesday morning.

Source : Equity Bulls

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