The rupee pared some of its initial gains and further slipped three paise against the US dollar on Friday, July 16, to settle at 74.57 (provisional) as investors awaited new triggers. At the interbank forex market, the domestic unit opened at 74.53 against the dollar and registered an intra-day high of 74.51. It witnessed a low of 74.66 during the session. In an early trade session, the local unit inched higher by two paise to 74.52 against the greenback.
The domestic unit finally ended the day at 74.57, down three paise over its last close. On Thursday, July 15, the local unit settled at 74.54 against the American currency. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.06 per cent to 92.56.
During the week, the domestic currency witnessed volatile trading as on Wednesday, it snapped its three-day winning streak to settle lower at 74.59 against the dollar. Yesterday, it settled higher to 74.54 against the greenback supported by domestic equities.
What analysts say:
Mr. Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services:
“The forex market focus will be on tonight’s US retail sales data and consumer confidence data for any reading on inflation and the strength of the recovery. Any solid pace of US economic recovery, will underpin the rumours of earlier than expected rate hikes/QE tapering keeping USDINR afloat till the July FOMC outcome.
So in USDINR spot until the support of 74.40 doesn’t break, the trend will remain positive towards 75. Only a break of 74.40 will push prices towards 74.00 zone.”
Mr Amit Pabari, MD, CR Forex:
”A fall in figures of unemployment claims to a 16-month low of 360,000 and US business activity growing at a record high lifted the US Dollar despite a fall in the 10-year bond yield.
Going ahead, traders are looking to U.S. retail sales data and consumer confidence for the strength of the economic recovery and further clues on dollar movement.
Despite dollar remaining on back foot and inflows on account of various IPO’s and QIP’s, rupee could not manage to break the 74.40 crucial support level yesterday. If the BIG-bull continues to play its part to curb volatility downside, any dips in the USDINR pair would be taken for buying by importers, and while for exporters, it would remain sideways to sell.
If inflows get standstill, a depreciation pressure resides on rupee and can take it towards 75.20-75.50 levels in the upcoming time.”
Kshitij Purohit, Lead International & Commodities at CapitalVia Global Research Limited:
”Given the pair’s struggle to break through the 75.00 barrier, as well as the recently rising momentum line, USD/INR prices are likely to conquer the significant support convergence near 74.50-74.45 as the quote eases.
Technically, the USDINR July opened on a flat note today and was moving in a marginally sideways trend since morning. Prices tested the same support level lying in the range of 74.55-74.53 from past four days, any closing below this range on daily charts may trigger sellers’ area and we may witness a sharp downfall till the next immediate support zone lying in 74.30-74.27.
Ultimately, prices again tried to breach this level and closed above 74.65 indicating that, buyers may come into action. If in the upcoming sessions, prices bounce back from the support zone 74.55-74.52, we may see a rise till 74.78-74.80 which is acting as a major profit booking zone from past few sessions and if prices close above this zone, we may see a further hike.”
Domestic Equity Markets Today:
On the domestic equity market front, the BSE Sensex ended 18.79 points or 0.04 per cent lower at 53,140.06, while the broader NSE Nifty slipped 0.80 points or 0.01 per cent to 15,923.40.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities:
“On a weekly basis, the market formed a complete reversal formation by closing above the highest level of the previous week. Also during the week, the market tested lower boundaries and crossed the upward barrier under the leadership of Financials and Technology companies. Except for the media and PSU bank, all other indices closed in the positive territory.
In the coming week, based on its technical formation, the Nifty has scope to move towards 16100 without much effort. However, for that, support from Banks and the FMCG sector will hold key. We feel the technology sector has delivered its best and now it’s the turn of the FMCG sector to support the market. The strategy should be to buy if Nifty corrects to 15900/15850 without hitting the levels of 16100. Traders should keep a final stop loss at 15750 for the same.
According to exchange data, the foreign institutional investors were net sellers in the capital market on July 15 as they offloaded shares worth Rs 264.77 crore. Global oil benchmark Brent crude futures advanced 0.37 per cent to $ 73.74 per barrel.