Indian rupee lost some ground today against the US dollar, British Pound and the Japanese Yen. Rupee weakened between 0.25-0.72% against the above three currencies, with British Pound seeing the most gains due to a better than expected retail sales data from UK. Against the Green back, rupee closed at 60.31/32 levels on spot. Central bank might have bought US Dollars quite aggressively over the past few sessions.
At the same time, there was not much activity from the commercials, as the financial year end is upon us and the last value date for spot trades has already past.
Forward premia continued to harden, the 12 month fwds was paid to 511/513 levels.
We suspect there might have been draw down and hedging of some large foreign currency loans and as a result, of which we have seen US dollar come under pressure in the spot but aggressively bought in the forward months.?
Tomorrow being the last trading day for the financial year, we do not expect much of a trend. We expect a range between 60.00/10 and 60.40/60 on spot.?
By Anindya Banerjee, analyst, Kotak Securities
