Rupee - Feb 2, 2021 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

The Indian Rupee appreciated against the U.S. currency, tracking domestic equity markets supported by hopes of a quick economic rebound following the union budget.

The Rupee had strengthened to an intraday high of 72.92 amid hopes that a proposal to increase in capital expenditure in the recently concluded union budget will boost risk appetite.

However, persistent concerns of further weakening of the fiscal deficit kept gains in check.

The Rupee ended at 72.96 compared with 73.02 in the previous session.

Markets will look ahead to cues from the Monetary Policy Committee decision due this week and the outlook on the economy by the Indian Central bank.

The benchmark BSE Sensex closed 2.5% higher today, while the Nifty ended higher by 2.6% extending yesterday's 5% rally.

Meanwhile, Asian currencies were mixed today, while the U.S. Dollar Index is trading flat this Tuesday afternoon, trading ahead of the important monthly payroll number on Friday.

Markets will also keenly await the progress of the U.S. Stimulus bill.

The one-year forward premium was at 3.60 rupees against 3.59 rupees in the previous session.

Technically, the USDINR Spot pair traded on flat note with some marginal downside momentum. It is sustaining below 73.00 levels which indicates Bearish trend could continue upto 72.90-72.75 levels. Resistance is at 73.10-73.25 levels.

Source : Equity Bulls

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