It was a roller coaster day for the Indian rupee against the US dollar today. The Indian currency started the day on a weak note on the back of risk-off prevailing in global and domestic equity markets and a sharp sell-off in majors triggered a short covering rally towards 62:55, where the alleged invisible hand of the central bank became a cap.
During the last two hours alleged intervention coupled with a lumpy inflow from a large corporate pushed the pair down towards 62 handle.
During the last hour, the pair dropped nearly 30 paise, which was not fully complemented by the futures prices, indicating ad hoc intervention in spot.
Over the next week, US December jobs data will be watched closely.
Outlook: We expect a range of 61:60/70 and 62:70/63:00 levels on spot. Demand will remain on dips for US dollar.
By Anindya Banerjee, currency analyst, Kotak Securities
NOTE: The views expressed are those of the author