Rupee settled up 0.36% at 60.24 saw a biggest single-day fall in nearly three weeks as investors turned cautious ahead of the upcoming federal budget this week while lack of dollar inflows due to the U.S. Independence Day holiday also hurt. Investors are unlikely to add large bets ahead of the budget on Thursday given concerns about volatility, although the rupee could be supported as continued foreign buying of shares send indexes to record highs.
The dollar firmed after the Department of Labor reported last week that non-farm payrolls rose by 288,000 in June, easily surpassing expectations for an increase of 212,000. However, by Monday trading after a holiday weekend in the U.S., profit takers wiped out the greenback’s advance. Many investors jumped to the sidelines to await the release of the minutes from the Federal Reserve’s June policy meeting on Wednesday, which may hold clues concerning the direction of monetary policy.
Still, the rupee was supported as foreign institutional investors bought shares worth $166.44 million and debt worth $402.69 million on Friday, regulatory data showed, taking total inflows in the year so far to $22.03 billion. In the offshore non-deliverable forwards, the one-month contract was at 60.23, while the three-month was at 60.79.
Technically market is under fresh buying as market has witnessed gain in open interest by 2.37% to settled at 558209 while prices up 0.215 rupee, now USDINR is getting support at 60.11 and below same could see a test of 59.95 level, And resistance is now likely to be seen at 60.36, a move above could see prices testing 60.45.
USDINR Intraday Highlights
• USDINR trading range for the day is 59.94-60.44.
• Rupee dropped as investors turned cautious ahead of the upcoming federal budget this week while lack of dollar inflows.
• Dollar gained as the momentum of last week’s stellar U.S. jobs data carried markets towards what will be a crucial earnings season for record high shares.
• Despite the improvement in the job market, the Fed is widely expected to keep interest rates near zero for at least a year even as it trims its bond-buying stimulus
• SELL USDINR @ 60.25 SL 60.45 TGT 60.02-59.82