Currencies World , June 17, 2014 …

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MCX-SX USDINR Jun 2014

Rupee saw its biggest single-day fall in four-and-a-half months as escalating civil war in Iraq dulled the buoyant risk appetite, with oil importers running in to buy the greenback on fears crude prices could spike further. India’s industrial production increased much faster-than-expected in April and consumer price inflation slowed more-than-expected in May, boosting hopes of better prospects for the economy after the new government took charge late last month.

Industrial production rose 3.4 percent year-on-year in April, data from the Central Statistics Office showed. In March, output grew a provisional 0.5 percent. India imports nearly two-third of its oil requirements with oil importers being the largest buyers of dollars in the local currency market. Foreign outflows related to an equity stake sale in Hero MotoCorp Ltd also weighed on the local currency.

The rupee fell 0.85 percent on the day, its steepest one-day drop since Jan. 24. On the week, the rupee slipped 1 percent, falling for the third straight week, which is also its biggest weekly fall since the week to Jan. 24. The evolving geo-political situation will be the key for the rupee’s direction in the near term, though the central bank is expected to intervene to prevent any excessive volatility in the local currency.

Technically market is under short covering as market has witnessed drop in open interest by -21.73% to settled at 319247 while prices up 0.5425 rupee, now USDINR is getting support at 59.265 and below same could see a test of 58.665 level, And resistance is now likely to be seen at 60.2, a move above could see prices testing 60.535.

USDINR Intraday Highlights

• USDINR trading range for the day is 58.68-60.55.
• Rupee saw its biggest single-day fall in four-and-a-half months as escalating civil war in Iraq dulled the buoyant risk appetite.
• India’s industrial production increased much faster-than-expected in April and consumer price inflation slowed more-than-expected in May
• Foreign outflows related to an equity stake sale in Hero MotoCorp Ltd also weighed on the local currency
• BUY USDINR @ 59.75 SL 59.56 TGT 59.95-60.15

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