USDINR View for Feb13

USDINR outlook for Feb 13.

Rupee seems exceptionally better assets since the year starts, it has already up by more than 3.5% compare to 2% rise in equity market and negative return in gold & other assets YTD.

Coming Month on technical charts USDINR looks bearish towards 52.10/51.70 and may retest its OCT low at 51.35 in coming weeks. However trend line support at 53.85 could be the ideal resistance in this correction and it may test 53.40/55 in corrective pullbacks.

Strong inflow from FII and Forex reserve at $295.75B on account of stake sale in OIL India, strong equity market domestic as well international are supporting factors in rupee strengthening. Proposed cut in fiscal deficit and moderate tax laws indicate optimistic outlook on coming Budget. Big events like NTPC stake sale of amount Rs.12, 000cr and foreign investment in the stake sale will continue more inflows of dollar into system. Ruia brothers-owned- Essar Oil is taking a leaf out of Reliance Industries Ltd (RIL)’s book, starting road shows to swap its rupee loans worth $2.2 billion (Rs 11,700 crore) with dollar loans, thus taking advantage of the good appetite from investors for the Indian paper. Strong domestic & international equity market, weaker YEN & Strong Euro is main indicator for softening in Dollar/Rupee prices. If Brent Oil breach $119 in ICE, it could impact negative on rupee, however the impact could be lesser as demands from Importer of goods from China & Gold will decline this month. As China will be holidaying from 9^th feb till 15^th feb (Lunar New Year) and most of the work will start in the last week of month.

Recommendation:

Exporter: Book USDINR within range of 53.07/53.20, Rupee Likely to strengthen

Importer: On breach of 53.40 one can book dollar for 53.80, and continue if breach 53.80. View on Rupee is upside this month.

Broader Range: USDINR – 53.55/53.75-52.30/51.95.

Disclaimer : The above mentioned View is for publication and sharing purpose and guarantee no profit or loss in any form of trading.Kindly advise with your financial adviser before taking any decision. The writer of this blog does not entertain any liability arise in any circumstances.