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Market Commentary
Rupee Wrap - March 4, 2022 - Reliance Securities
Posted On : 2022-03-04 20:01:51( TIMEZONE : IST )
Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
The Indian Rupee depreciated against the dollar for the 4th straight session logged its worst week against the dollar in five months as intensifying geopolitical risks due to the Russia-Ukraine conflict kept crude oil prices upside intact, heightening worries about domestic inflation and wider trade deficits.
Additionally, accelerating portfolio outflows from the country's capital markets also weighed on the domestic unit.
The Rupee ended at 76.16 its weakest since December 15, and against 75.91 close in the previous session.
For the week, it weakened by 1.2% and extended last week's 0.8% drop.
Further depreciation may have been capped amid talks of the Reserve Bank of India's dollar sales.
Asian equities and currencies were mostly weaker this Friday and remained weak for the week and weighed on sentiments.
Indian bond yields jumped this week tracking a sharp rally in crude oil prices but ended weaker on Friday amid profit taking ahead of RBI swaps next week.
The benchmark 6.54% bond ended at 6.81%, against 6.83%, close in the previous session.
Technically, the USDINR spot pair has given a breakout of Rising Channel formation where above 76.00 could see a bullish momentum up to the resistance zone at 76.33-76.49 levels. A trade below could pull the pair to the support zone at 75.90-75.75 levels.
The USDINR Spot pair could trade in a range of 75.95-76.35 levels in the coming session.
The U.S. Dollar is trading stronger this Friday morning in European trade as investors moved towards the safe-haven assets.
Investors will look cues from the U.S. jobs number tonight.
The Euro and the Sterling were weaker, while the Yen was stronger this Friday morning in European trade.
Technically, if Dollar Index witness a breakout above $98.00 it could witness a bullish momentum up to the resistance zone at $98.15-$98.40 levels. A trade below could pull the pair to the support zone at $97.90-$97.78 levels.