Currencies World 24-06-2014 …

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MCX-SX USDINR Jun 2014

Rupee ended weak posting losses for a fourth straight week as high global oil prices posed a risk to the country’s current account and inflation. On the week, Indian rupee lost 0.7 percent to the dollar, and was the second-most weak currency in Asia after the Indonesian rupiah, which ended down 1.5 percent on the week. Sources expect falls in the rupee to continue next week due to month-end dollar demand from importers.

The rupee to weaken to as much as 61 per dollar unless the central bank aggressively steps in to protect the currency if global oil prices continue to stay high. On Tuesday, the rupee had slumped to a near-two-month low of 60.55 per dollar but recovered after traders said state-run banks sold dollars, likely on behalf of the central bank. In addition, exporters also sold dollars, which aided the rupee’s recovery.

Earlier last week, Reserve Bank of India Governor Raghuram Rajan also assured markets that despite the uncertainty in Iraq India was better positioned to tackle any shocks on the external front. In the offshore non-deliverable forwards, the one-month contract was at 60.49, while the three-month was at 61.07. The partially convertible rupee ended at 60.1850/1950 per dollar versus its previous close of 60.08/09.

Technically market is under short covering as market has witnessed drop in open interest by -10.25% to settled at 274319 while prices up 0.0775 rupee, now USDINR is getting support at 60.18 and below same could see a test of 60.0725 level, And resistance is now likely to be seen at 60.4075, a move above could see prices testing 60.5275.

USDINR Intraday Highlights

• USDINR trading range for the day is 60.06-60.51.
• Rupee ended weak as high global oil prices posed a risk to the country’s current account and inflation.
• Sources expect falls in the rupee to continue next week due to month-end dollar demand from importers.
• RBI assured markets that despite the uncertainty in Iraq India was better positioned to tackle any shocks on the external front.
• BUY USDINR @ 60.10 SL 59.90 TGT 60.36-60.54.

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