Rupee - Currency Update - Dec 9, 2020 - Reliance Securities

The Indian Rupee appreciated against the U.S. currency on the back of surging dollar inflows into local equities.

However, possible central bank intervention to mop up dollar inflows trimmed gains on the local unit.

Foreign investors have pumped in over $2 billion in December in equities, after bringing in over $9 billion in November.

The Rupee ended at 73.52 to the dollar compared with 73.90 in the previous session.

Asian currencies were mixed, but Chinese Yuan extended gains this Tuesday and lent support.

The one-year forward premium was at 3.22 rupees against 3.21 rupees in the previous session.

The benchmark BSE Sensex and the broader NSE index rose for the sixth day in a row to end at record highs, gaining 0.40% and 0.28%, respectively on Tuesday.

The benchmark 5.77% bond maturing in 2030 ended at 98.76 rupees, yielding 5.94%, its highest level since Oct. 19, against 98.87 rupees, yielding 5.92% on Monday.

FPI ACTIVITY

FPI bought net $446.72 million as on 07 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 $2.137 billion.

Since the month of March 2020 FPI were net buyers of a total of $7.028 billion.

The Dollar ended flat to higher on Tuesday in lackluster trade as investors await fresh triggers.

Downside remained capped as still no agreement was reached between U.S lawmakers on the U.S. stimulus aid package as the deadline looms.

The Euro and the Sterling ended flat against the U.S. Dollar on Tuesday.

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

OUTLOOK - DOMESTIC & INTERNATIONAL CURRENCY

The Indian Rupee could start this Wednesday on a flat note against the U.S. Dollar as investors have turned cautious, globally ahead of key events looming for the markets.

RBI's presence in the market and a steady U.S. Dollar could also keep appreciation bias limited.

On the other hand, dollar inflows into local equities could keep depreciation bias limited.

The Rupee could likely open around 73.50-73.55 per dollar compared with 73.52 at close on Tuesday.

Meanwhile, NDF is at 73.69/75 this Wednesday morning vs a close of 73.67 on Tuesday.

Technically, the USDINR Spot pair gave a sharp fall from 50-Daily Moving Average at 73.85 levels and below the level could continue to trade downside support at 73.30-73.15 levels.

Resistance is at 73.75 but above the level will resume upside momentum up to 73.88-74.00 levels.

The USDINR Spot pair is expected to trade in a range of 73.30-73.75 levels for the coming few sessions.

US Dollar Index was trading flat this Wednesday morning in Asian trade.

The Euro and the Sterling were trading flat against the U.S. Dollar this Wednesday morning in Asian trade as trade negotiations between the U.K and E.U are deadlocked.

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

Uncertainty around Brexit, around the progress of a fiscal spending package through U.S. Congress and around the outcome of Thursday's ECB meeting have traders temporarily cautious.

Source : Equity Bulls

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