In a highly volatile trade, the Indian rupee this week ended lower by 16 paise at 53.63/64 against the US unit, and remained sluggish for the sixth straight week.
The CEO of Alpari Financial Services (India) Pvt Ltd, Mr Pramit Brahmbhatt, said “The INR continued to weaken towards its previous week’s lows on declining capital inflows due to falling equity markets. The Indian equity markets led the fall along with weak global markets on Euro zone progress which dominated the headlines with a hung parliament in Greece and change of leadership in France, raising concerns over the Euro zone recovery.”
According to him, the week started with some positivity coming in Indian equities over the amendments to the Finance Bill 2013 which deferred the GAAR by one year, and other conducive amendments. But weak global outlook as well as some negative local news, including contraction in industrial production data, spoiled it.
The week also marked the RBI coming to the rescue of ailing rupee through relaxation of EEFC and NOOPL account norms where the foreign exchange earners are allowed to convert 50 per cent of their foreign exchange into local currency. The everlasting demand from Oil importers and risk aversion on weak global sentiments has been taking toll on RBI’s efforts.
The rupee has formed two zones; one at 54.00 levels as the Exporter zone and the other around 53.00- 52.50 levels as Importer zone, and it has been witnessed that as the rupee approaches any of the zones then they become active around their respective zones. A daily close above 54.20 levels shall test the 54.60 and 54.90 marks and a close below 52.90 shall test 52.50- 52.10 levels. Till then we expect the INR to trade in the range of 54.00- 53.00 levels and aggressive traders can sell INR around 53.90 levels with a stop loss above 54.20 targeting 53.50 - 53.30 levels.