(Time Zone: Arizona, USA)
Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
The Indian Rupee appreciated against the U.S. Dollar this Monday tracking gains in regional currencies and on foreign inflows into local equities.
The Rupee ended at 72.94 compared with 72.98 in the previous session. The rupee had initially appreciated to 72.89 earlier in the session.
Most Asian currencies were stronger against the dollar despite the Greenback showing resilience this Monday.
The Federal Reserve will meet for its first policy meeting in 2021 on Tuesday, with its decision to be handed down on Wednesday. The thing to watch out for will be whether the Fed changes its outlook on the U.S. Economy as covid-19 continues to threaten the recovery.
Meanwhile, investors will be also awaiting the passage of the U.S. stimulus bill.
The one-year forward premium jumped to 3.65 rupees, the highest since Mar. 23, against 3.57 rupees in the previous session. It was last at 3.62 rupees.
On the domestic front, investors will be keenly awaiting India's federal budget, due on Feb. 1., especially on the fiscal guidance front.
Technically, the USDINR Spot pair has bounced back from 72.86-72.90 levels where it holds a multiple support zone and above these levels could see an upside move up to 73.08-73.15 levels.