Rupee - Jan 29, 2021 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

The Indian Rupee appreciated on Friday and appreciated marginally in the first month of the new year against the U.S. currency supported by portfolio inflows into the domestic equity markets.

However persistent intervention by the central bank and a broad rally on the dollar index capped gains of the currency.

The Rupee ended at 72.95 to the dollar compared with 73.04 on Thursday.

The unit ended flat for the week, but gained 0.2% in January, after appreciating 1.3% in the previous month.

The focus of the market is currently on the upcoming federal budget on Monday.

Asian currencies were broadly mixed this Friday. While, the U.S. Dollar Index was higher this Friday and capped gains of the local unit.

The one-year forward premium was at 3.57 rupees against 3.52 rupees in the previous session.

Meanwhile, the Economic Survey 2020-21 projected a contraction of 7.7% battered by the coronavirus lockdown. However, the survey also projected the GDP expanding by 11% in the 2021-22 fiscal year.

Markets will also look to cues from April-December fiscal deficit data and FY20 revised GDP data.

Apart from the important data, RBI will release the weekly foreign exchange data.

Technically, the USDINR Spot pair took a resistance near 21-Daily Moving Average at 73.09 levels and has formed a Spinning Top kind Candlestick which could be a sign for Bearish Reversal. Support is at 72.85-72.70 levels. Resistance is at 73.05-73.15 levels.

Source : Equity Bulls

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