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Rupee expected to underperform among Asian currencies - HDFC Securities

Indian rupee expected to trade with negative bias as rise in virus cases and strict restriction in state may adversely impact the economic recovery. Monday’s economic data are just a beginning of the same as we have seen rise in inflation and fall in industrial output. We expect coming few months data wont be encouraging for economy and we could see foreign fund outflows.

Rupee expected to open slightly lower, after two days of holiday. On Monday, Rupee fell for the fifth day in row, first time after December 2019 and closed at weakest level after August 2020. Spot USDINR closed at 75.06 with gain of 31 paise on Monday.

Rupee expected to trade with negative bias and underperform among Asian peers following domestic worries. Technically, spot USDINR is having support at 74.50 and resistance at 75.70.

Asian equities look set to retreat after U.S. stocks closed off all-time peaks. The reflation trade is trying to make a comeback after going sideways over the past month. U.S. Treasury yields rose Wednesday while a weaker dollar and higher oil lifted commodities.

The Federal Reserve will likely taper off its bond purchases before considering raising interest rates, Chair Jerome Powell said. “We will reach the time at which we will taper asset purchases when we’ve made substantial further progress toward our goals from last December, when we announced that guidance,” Powell said Wednesday. “That would in all likelihood be before - well before - the time we consider raising interest rates.” Policy makers will wait until inflation has reached 2% sustainably and the labor-market recovery is complete before considering lifting rates, and the combination is unlikely to happen before 2022, he said.

USDINR

USDINR April futures closed above Doji candlestick high suggesting continuation of upward trend.

The pair has retraced 78.6% from low of 72.78 which could be a supply area. However, the bias remains on right side following overall chart structure.

Momentum oscillators and indicators are suggesting positive momentum with trend.

USDINR April futures has resistance at 75.50 and 75.90 while expected to find support around 74.45.

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