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Market Commentary
Rupee Wrap - March 2, 2022 - Reliance Securities
Posted On : 2022-03-02 19:03:49( TIMEZONE : IST )
Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
The Indian Rupee depreciated for a 2nd straight day against the dollar, as oil prices rose to multi-year highs, and could hamper the country's growth and inflation outlook.
The Rupee ended at 75.70 its weakest since December 20 vs. a close at 75.34 in the previous session.
The currency tested an intraday low of 75.86 earlier today but presence of Reserve Bank of India's capped further depreciation.
Rumours of lack of exporter selling pressure and foreign outflows from the domestic equities have also kept Rupee's appreciation bias capped.
Additionally, flows into the domestic IPO's could dry up due to the escalated tensions in Eastern Europe has also weighed on sentiments.
Finance Minister Nirmala Sitharaman in a media interview recently said the government may take another look at the timing of LIC IPO amid the Russia-Ukraine crisis.
Indian government bond yields rose for the 2nd consecutive session as a jump in crude oil prices, amid the escalating Ukrainian crisis, spooked investors.
The benchmark 6.54% bond ended at 6.81%, the highest since February 4, vs. 6.77% on Monday.
NDF is at 75.73/85 this Wednesday morning vs a close at 75.76 on Tuesday.
Technically, if the USDINR spot pair trades above 75.80 could continue to push the pair to the resistance zone at 75.94-76.12 levels. A trade below could pull the pair to the support zone at 75.68-75.55 levels.
The USDINR Spot pair could trade in a range of 75.60-75.95 levels in the Thursday session.
The U.S. Dollar is trading stronger this early Wednesday evening in European trade demand for dollars rose as nervous traders looked for safety.
Investors will look to cues from the Fed Chairman's testimony tonight.
The Euro, the Sterling and the Yen were weaker this early Wednesday evening in European trade.
Technically, if Dollar Index trades above $97.44 it could continue its upside momentum up to the resistance zone at $97.75-$98.15. A trade below could pull the Index to the support zone at $97.00-$96.85.
