Currencies World 04-07-2014 …

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MCX-SX USDINR Jul 2014

Rupee posted its biggest single-day gain since mid-May and rose to its highest level in more than two weeks on the back of heavy dollar sales by custodian banks along with some corporate dollar inflows. Aiding sentiment was a record run by Indian shares after Finance Minister Arun Jaitley’s warning against “mindless populism” raised hopes the government would unveil a fiscally prudent budget next week.

The central bank was spotted buying dollars sporadically after the unit crossed 59.70 levels, but strong inflows helped the rupee continue to gain nonetheless. The Reserve Bank of India has tended to intervene when the rupee strengthens above 60 to the dollar. The Reserve Bank of India (RBI) said on Wednesday it has sought quotes from banks to swap gold in its own vaults for international-standard gold, aiming to improve the management of its reserves. The RBI said the operation would “standardise the gold available with RBI in India with respect to international standards” and the gold acquired would be delivered to its overseas custodian, the Bank of England.

The current account deficit had touched a record high of 4.8 percent of gross domestic product in 2012/13. The partially convertible rupee closed at 59.6875/6975 per dollar compared with 60.07/08 on Tuesday. Technically market is under long liquidation as market has witnessed drop in open interest by -5.16% to settled at 536200 while prices down -0.515 rupee, now USDINR is getting support at 59.81 and below same could see a test of 59.6125 level, And resistance is now likely to be seen at 60.2975, a move above could see prices testing 60.5875.

USDINR Intraday Highlights

• USDINR trading range for the day is 59.59-60.57.
• Rupee rose on the back of heavy dollar sales by custodian banks along with some corporate dollar inflows.
• The central bank was spotted buying dollars sporadically after the unit crossed 59.70 levels, but strong inflows helped the rupee continue to gain nonetheless.
• The Reserve Bank of India has tended to intervene when the rupee strengthens above 60 to the dollar.
• SELL USDINR @ 60.15 SL 60.35 TGT 59.90-59-65

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