Rupee - August 27, 2021 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

The Indian Rupee appreciated against the U.S. Dollar on Friday and had its best week in four months, as the central bank's absence from the market prompted exit of long positions on the dollar.

The Rupee ended at 73.68 gaining by 0.7% on Friday and highest since Jun. 17, compared with 74.22 in the previous session.

The Rupee gained 1% this week, the most since week ended Apr. 30.

The local unit was rangebound for the whole week but had its biggest single session rise in over four months, on dollar sales by foreign banks amid anticipated inflows.

Additionally, lack of presence from RBI near 74.00, triggered a lot of stop losses in the dollar long positions and saw a big appreciation above the 74.00 mark.

Furthermore, the dollar index was marginally weak by 0.5% so far in the week and aided sentiments back home.

On the charts, supports for the USDINR spot pair is at 73.50 and a trade below could pull the pair to 73.30 levels. However, a trade above could push the pair back to 74.00 levels.

However, the dollar index was flat this Friday ahead of U.S. Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole Summit later today.

There is a remote possibility that the Fed chair may not announce anything in his speech on Friday and could make an announcement at the September meeting after the awaiting the August non-farm payroll number in the 1st week of September.

However, a more cautious tone will be dovish for the dollar and further aid bullion and vice versa.

On the charts, range for the dollar index ahead of the speech will be from $92.80 to $93.20. after the speech, breakout on either side will provide fresh trading range. A break above $93.20 could push the Index to $93.50 levels, but a breakdown below will pull the index back to $92.50 levels.

Source : Equity Bulls

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