Views on Rupee - Feb 21, 2022 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

The Indian Rupee appreciated on Friday and logged its best week against the U.S. dollar in 8 weeks, as investors booked profits on long dollar positions after minutes of the Federal Reserve's latest meeting came on expected lines.

The Rupee ended at 74.66 its strongest since January 31, compared with 75.11 close on Thursday.

The Rupee appreciated by nearly 1% this week, its biggest gain since December 24.

The dollar index ended flat, while the crude oil prices also took a tumble on Friday's trade and aided sentiments.

Most of the Asian and EM peers were mixed on Friday but were stronger for the week lifted by flat dollar.

Indian government bond yields were down for a second straight week, as auction cancellation and a dip in crude oil prices lifted sentiments.

The benchmark 6.54% bond ended at 6.66%, against 6.67% close on Thursday.

The Indian Rupee could open flat to stronger this Monday morning as tensions calmed in Eastern Europe.

A potential Russia-U.S. meeting cooled some nerves about an escalation in the Ukraine conflict is likely to lift sentiments.

Additionally, crude oil prices eased, while most EM and Asian peers strengthened against the dollar this Monday and could aid the domestic unit.

The Rupee could open around 74.58/60 this early Monday morning vs. a close 74.66 on Friday.

NDF is trading at 74.56/62 this early Monday morning vs. a close 74.59 on Friday.

Technically, the USDINR Spot pair has given a breakdown below 50-Daily Moving Average at 74.74 levels and sustained trade below continue to pull the pair up to the support zone at 74.40-74.22 levels. Resistance zone is at 74.85-75.00 levels.

The USDINR Spot pair could trade in a range of 74.40-74.88 levels in this Monday's session.

The U.S. Dollar Index is flat this Monday morning in Asian trade.

U.S. is shut today on account of President's Day holiday, so volumes could remain low.

Technically, Dollar Index is trading below 21 and 50-Daily Moving Average at $95.99 levels and sustained trade below continue to pull the Index up to the support zone at $95.64-$95.17 levels. Resistance zone is at $95.99-$96.18 levels.

The Euro and the Sterling were also trading stronger against the greenback this Monday morning in Asian trade as investors await the outcome from the U.S-Russia meeting on Ukraine outcome this week.

Source : Equity Bulls

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