Rupee - May 25, 2021 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

The Indian Rupee appreciated against the U.S. Dollar tracking losses on the dollar index after fresh assertion from Federal Reserve officials that policy would stay on hold calmed investor fears about inflation forcing interest rates higher.

The Rupee ended at 72.77 compared with 72.96 in the previous session. It had risen to 72.75 earlier in the session, the highest since Mar. 26.

Lack of RBI's presence in the market also helped the currency this Tuesday.

Other Asian peers also received a boost from the fall in the dollar index and U.S. Treasury yields and lent support to the domestic unit. The onshore Chinese Yuan reached 6.4016 to the dollar, its highest level since June 2018.

The one-year forward premium was at 3.85 rupees, against 3.82 rupees in the previous session.

Indian markets will remain closed tomorrow for a local holiday.

Technically, the USDINR spot pair has marginally settled over an important support at 72.70 and if the RBI remain absent, we could witness the pair test 72.50 levels. If RBI intervenes, the pair could move back to 73.00 levels. Range for the pair is 72.50-73.00.

The Dollar was trading weaker against a basket of peers on Tuesday afternoon trade in Asia, while the Euro, the Sterling Pound and the Safe haven Yen strengthened on Tuesday afternoon trade in Asia.

Technically, the dollar index support is at $89.55 and a close below could pull the index to $89.20 levels. Resistances are at $89.80 and $90.00.

Source : Equity Bulls

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