Bunched up demand after a long weekend resulted in rupee weakness yesterday. A weaker rupee today will result in importers covering their weekly payables. Rupee will not be affected by a strong US dollar unless Indian stock markets crash and/or foreign investors outflows rise. The picture on monsoon rainfall will be clear in the next two weeks. The actual economic impact of a nearly failed monsoon this year will be known in the next two weeks to three weeks. Till then short bouts of weakness will be met by exporter selling and inflows from non-resident Indian and Indian working globally.
The government is working. There is speculation of a diesel price decontrol. Under recoveries in diesel is at an all-time low. There is also speculation that subsidized LPG cylinders could see very small monthly price hikes from next year (just like diesels fifty paisa a month hike). A lower subsidy burden on the exchequer will always be bullish for the rupee in the long term. Temporary big spikes (if any) in the rupee, will be a welcome relief for the exporter community.
Between middle of September to end October Indian living globally and having families or relatives in India will repatriate US dollars in India. They will be using sharp weakness in the rupee to transfer funds to India.
In September unless usd/inr does not break and trade over 61.76 in the inter-bank market we prefer a sell on rise strategy. However till Friday one needs to be watch due to US economic data release risk.
Usd/inr September 2014: Only a break of 61.22 will result in further gains to 61.56-61.82. There will be sellers as long as usd/inr does not break 61.22 with 60.76 and 60.53. Jobbers watch 60.96 all the time.
Euro/inr September 2014: A consolidated break of 80.09 will result in 80.27 and 80.62. Initial support is at 79.76.
Gbp/Inr September 2014: Cable needs to trade over 100.39 for the whole day to rise to 100.76 and 101.10. Initial support is at 100.19 with 99.96 as the key intraday support.
Jpy/Inr September 2014: Overall bearish below 58.18 with 57.76 and 57.51 as the key support.
The government is working. There is speculation of a diesel price decontrol. Under recoveries in diesel is at an all-time low. There is also speculation that subsidized LPG cylinders could see very small monthly price hikes from next year (just like diesels fifty paisa a month hike). A lower subsidy burden on the exchequer will always be bullish for the rupee in the long term. Temporary big spikes (if any) in the rupee, will be a welcome relief for the exporter community.
Between middle of September to end October Indian living globally and having families or relatives in India will repatriate US dollars in India. They will be using sharp weakness in the rupee to transfer funds to India.
In September unless usd/inr does not break and trade over 61.76 in the inter-bank market we prefer a sell on rise strategy. However till Friday one needs to be watch due to US economic data release risk.
Usd/inr September 2014: Only a break of 61.22 will result in further gains to 61.56-61.82. There will be sellers as long as usd/inr does not break 61.22 with 60.76 and 60.53. Jobbers watch 60.96 all the time.
Euro/inr September 2014: A consolidated break of 80.09 will result in 80.27 and 80.62. Initial support is at 79.76.
Gbp/Inr September 2014: Cable needs to trade over 100.39 for the whole day to rise to 100.76 and 101.10. Initial support is at 100.19 with 99.96 as the key intraday support.
Jpy/Inr September 2014: Overall bearish below 58.18 with 57.76 and 57.51 as the key support.
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