Rupee - Feb 17, 2021 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

The Indian Rupee depreciated against the U.S. Dollar on Wednesday in over two weeks, tracking a further uptick in the U.S. 10-year yield to a one-year high and a rebound in the Dollar index.

The U.S. bond yields rose on Wednesday afternoon trade supported by the prospects of further economic recovery and a possible acceleration in inflation.

The Rupee ended at 72.74 compared with 72.69 in the previous session. The rupee had initially weakened to 72.92 earlier in the session, but trimmed losses possibly on the back of exporters' dollar sales.

Investors will look for confirmation of the Fed's commitment to maintain its dovish policy stance and for the outlook on asset purchases, which will in turn drive the outlook for U.S. yields.

Among Asian currencies, the offshore Chinese Yuan was weak by 0.28%, while the Indonesian Rupiah was weak by 0.72% this Wednesday's trade and weighed on sentiments.

The one-year forward premium was at 3.72 rupees against 3.74 rupees in the previous session.

Most of the non-dollar currencies were weak this Wednesday afternoon trade.

The minutes of the Fed's January meeting are due today, along with retail sales data from the U.S.

Technically, the USDINR Spot pair holds resistance near the 21-Daily Moving Average at 72.90 levels and below which could see Bearish momentum up to 72.60-72.48 levels. However, a trade above 72.95 levels could see upside move 73.05-73.20 levels.

Source : Equity Bulls

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