Rupee - July 23, 2021 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

The Indian Rupee appreciated against the dollar and posted its third consecutive weekly rise against the dollar, as risk appetite improved as regional equities and currencies shrugged off worries over a surge in coronavirus infections.

Exporter dollar sales and corporate dollar inflows also aided sentiments.

The Rupee appreciated by 0.2% this, adding to total gains of 0.2% in the last two weeks.

Earlier in the week, regional equities and currencies had weakened following concerns that a surge in coronavirus infections in the U.S. and countries in Asia and Europe could hamper prospects of a swift economic rebound.

However, regional currencies and equities recouped losses on hopes that the impact of the virus may be limited.

The Dollar was set to end the week with small gains after a turbulent few days when currencies were buffeted by shifting risk appetite.

The dollar also got a lift from dovish European Central Bank comments.

ECB met expectations by pledging to keep interest rates at record lows for even longer.

The single currency fell as investors digested the European Central Bank statement and slightly dovish comments by ECB President Christine Lagarde.

Rest of the currencies were weak against the Greenback this week.

OUTLOOK

Currency traders and investors will look to cues from the Fed's policy decision, due next week.

Investors will be closely eyed to assess the timing of the next bond taper, especially since labour market data is suggesting that economic recovery may have peaked.

Fed fund futures now reflect a lower possibility of the U.S. central bank raising rates next year.

On the other hand, other data like durable goods orders and U.S GDP data for 2nd quarter could also drive markets.

Back home, the local unit could look to the dollar inflows and dollar sales.

Technically, the USDINR Spot pair immediate resistance remains at 74.67-75.02 levels. Support is placed at 74.30-74.16 levels. The USDINR Spot pair could trade in a range of 74.10-74.80 levels in coming week.

Internationally, on the charts, the Dollar Index holds a support of 21-Daily Moving Average which is placed at $92.47 level above which will continue its bullish momentum up to $93.20-$93.44 levels. Support is at $92.50-$92.27 levels.

Source : Equity Bulls

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