|
|
|
Rising trade deficit to dampen rupee's prospects
|
|
|
|
Top Stories |
|
|
|
|
SME Times News Bureau | 18 Jan, 2021
Rising trade deficit along with chances of a populist budget might dampen rupee's prospects during the coming week.
Nevertheless, persistent interest of FIIs in India's equity market will arrest any sharp depreciation moves.
"The
25-month high trade deficit may put brakes for strong rupee
appreciation. Equity markets also looks stretched and a cool-off looks
imminent now. Eyes will be on the budget and the ballooning fiscal
deficit, which can be a challenge for the local currency," said Sajal
Gupta, Head, Forex and Rates, Edelweiss Securities.
On the other hand, new IPOs and hopes of healthy Q3 earning results will retain FIIs' interest in equities.
"We
have two IPO subscriptions next week, which can attract FII
participation and keep the USDINR spot lower," said Rahul Gupta, Head of
Research-Currency at Emkay Global Financial Services.
"However,
RBI's intervention will be eyed. In spot 73 is acting as strong support,
a break of which will push prices towards 72.70-72.75 and then the
72.50 zone. However, 73.50 will act as immediate resistance," he added.
Till now in January, FIIs have invested around $ 2.3 billion in equities.
Consequently, the rupee continued to appreciate and closed at 73.07 to a greenback.
"We
have an important event this week. President-elect Joe Biden and Vice
President-elect Kamala Harris will be sworn in during the 59th inaugural
ceremony in Washington DC on January 20. It is important that this
event passes peacefully in light of the recent violent attack by Trump
supporters on the US Capitol. We expect rupee to consolidate in the
range of 72.75 to 73.3 for this week with depreciating bias," said
Devarsh Vakil, Deputy Head of Retail Research at HDFC Securities.
The
swearing-in assumes significance since the incoming US administration
has announced a new stimulus package. If enacted, the $1.9 trillion
package will deliver a further jolt of fiscal stimulus to the struggling
US recovery.
"As the newly elected President takes charge more
clarity on the stimulus package will be important to watch. Market
participants will also be keeping an eye on the ECB and Bank of Japan
policy statement; expectation is that the both the major central banks
are expected to maintain a dovish outlook," said Gaurang Somaiya, Forex
& Bullion Analyst, Motilal Oswal Financial Services.
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|