Indian rupee remained locked in quiet range against the US dollar today. Indian rupee traded within a high-low of 61:53 and 61:72 on spot and finally closed flattish around 61:54 levels against the US dollar.
FIIs continue to pour large sums of money into the Indian debt market. Between last Friday and last Monday, they have bought nearly $1.4 billion of debt securities. At the same time, Indian equity markets continue to perform well, as both NSE Nifty and BSE Sensex inch closer to their respective life highs. Such a Goldilocks scenario has allowed Indian rupee to ignore the weakness in other major currencies.
Today comments from rating agency Moody’s, that they do not intend to reduce India’s sovereign rating any time soon, also worked in rupee’s favour. Macro newsflow from major economies around the globe was mixed with Japan reporting strong orders for machinery in December but Australia reported dismal jobs data for the last month. Euro zone reported? lower than expected in December.
Outlook: Over the near term we expect Indian rupee to trade within a range of 61:40 and 61:80 on spot, with the possibility that the down trend can extend , towards 61:00, in case 61:40 caves in on high volume.
By Anindya Banerjee, currency analyst, Kotak Securities
NOTE: The views expressed are those of the author.
