Rupee Update - April 16, 2021 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

The Indian Rupee appreciated for the first time in seven sessions against the U.S. dollar as talks of RBI's intervention in the spot markets outweighed fears over the economic shock of rising covid-19 infections.

The Rupee ended at 74.92 compared with 75.06 in the previous session. The currency had earlier weakened to 75.32.

The one-year forward premium was at 3.51 rupees, against 3.52 rupees in the previous session.

The Indian benchmark government bond yields rose on Thursday to 6.13%, against 6.01% at the previous close despite the central bank buying notes under its so-called government securities acquisition programme.

Meanwhile, some support also came in the form of falling Greenback.

The U.S. dollar fell to a 4-week low against other major currencies on Thursday afternoon trade as Treasury yields eased from last month's surge as investors expect the Fed to remain dovish through the year despite a rise in inflation.

India's exports totalled $34.45 billion in March, rising from $27.93 billion in February and compared with $21.49 billion a year earlier. Imports surged 53.7% from year earlier to $48.38 billion in March, rising from $40.54 billion in the previous month.

India's trade deficit amounted to $13.93 billion in March, stretching from $12.62 billion in February and $9.98 billion a year earlier.

Meanwhile, several Indian states today said they have imposed fresh restrictions to curb the second wave of the Covid-19 pandemic.

The Indian Rupee could start this Thursday on a stronger note against the U.S. Dollar, tracking the weakness of the bond yields and weak dollar.

The Rupee could likely open around 74.75-80 per dollar compared with 74.92 at close on Thursday.

Meanwhile, NDF is trading at 74.70/80 this Friday morning vs. a close of 74.68 on Thursday.

Meanwhile, Asian currencies were mostly weaker this Friday and could cap gains.

Technically, the USDINR Spot pair found resistance near 75.35-75.50 levels from where the pair settled below 75.00 levels and now could see a downside move up to 74.70-74.65 levels. The USDINR Spot pair could trade in a range of 74.70-75.20 levels.

The Dollar ended marginally lower on Thursday as strong data offsets lower yields.

On the data front, the initial weekly jobless claims fell by 193,000 to 576,000, beating market expectations and reaching new pandemic lows.

Additionally, U.S. retail sales jumped 9.8% last month following an upwardly revised drop of 2.7% in February, according to the latest data from the U.S. Commerce Department.

The Euro and the Sterling ended flat on Thursday.

The safe haven Yen ended stronger on Thursday against the greenback.

The U.S. Dollar rebounded from Thursday's low and was trading small gains this Friday morning in Asian trade supported by upbeat data and rebounding yields.

Technically, the Dollar Index could trade within the range $91.50-$92.25.

The Euro, the Sterling and the safe haven Japanese Yen has started weaker against the U.S. Dollar this Friday morning in Asian trade.

Source : Equity Bulls

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