Indian rupee opened firm at 60.51 and then made a high of 60.38 due to firm Asian currencies and equity markets, dollar sales by exporters and S&P analyst quote that deficit cutting steps are positive for improving sovereign credit rating.
However dollar demand from corporates at lower level, covering of short dollar position ahead of Fed Yellen speech at Jackson hole led rupee to pare some of its intraday gains and make a intraday low of 60.5550.Rupee closed at 60.4650 firm by 0.34%.
Short term technicals are into oversold zone and a reversal in rupee from a critical zone of 60.35/40 level can be seen as a reversal in appreciation momentum in the near term. As far 60.35/40 holds we can expect some weakness towards 60.75/80 levels.
By Hemal Doshi, Geojit Comtrade Ltd.