Rupee Near A Month High On Fund Inflows - HDFC Securities
Rupee expected to start with gains following weaker greenback. The dollar drifted lower along with real yields due to explosion of the pandemic in the US while coronavirus cases in Europe seem to be peaking. The forex market expected to trade today with light volume on back of US Thanks giving holiday.
Indian rupee continued its upward journey by gaining seven out of eight trading session backed by massive dollar inflows in domestic equity market. So far the month, foreigners have poured around $7 billion in equities. On Wednesday, Rupee closed at 73.91 a dollar gaining 9 paise.
Sovereign Indian bonds trade little changed ahead of the central bank’s Operation Twist, where it plans to buy long bonds and sell shorter-maturity notes. RBI plans to conduct Federal Reserve-style Operation Twist where it will buy 100b rupees of bonds and sell an equivalent amount of short-term notes. The 10-year yields steady at 5.89% on Wednesday.
Minutes from the most recent FOMC meeting offered something for everyone. They signaled that the Fed may buy more bonds or shift its purchases toward the long-end of the curve to add stimulus, but it added that there’s no sense of urgency to do so. The yield curve steepened a tad on the news. Earlier, initial jobless claims hit a five-week high while durable goods orders rose more than expected. Consumption was in line with estimates, while personal income fell. And oil inventories signaled demand strength.
December futures formed Doji candlestick pattern indicating indecisiveness among traders on expiry day. The pair has been trading well below short term moving averages.
Momentum oscillator, RSI of 14 days period heading towards oversold zone suggesting continuation of downward movement.
MACD also turned weak and could fell below zero line suggesting weaker trend going ahead.
The pair expected to trade with negative bias and could touch 73.60 in coming days while resist at 74.70, the 20 DMA.
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