Rupee likely to be under pressure in medium term: JP Morgan

According to Brijen Puri, head of forex trading, JP Morgan, the rupee will be under pressure until there are credible solutions to the euro zone.

Below is the edited transcript of the interview.Also watch the accompanying video. Q: What has lead to the pullback in rupee today? Is it in sync with the stock markets or it has anything to do with what is going on in the euro region? A: It has a lot to do with the short covering rally that we are seeing on risk across, be in the euro zone or in Asia. Rupee is also participating in that as our Indian equities. We continue to underperform a little bit compared to regional peers. We are seeing some importer demand at lower levels. Q: Do you see significant upside in the near term? Do you see Rs 52/USD plus levels soon again? A: In the short term depending on the risk rally, we could see a couple of percentage move from here so maybe a Rs 50.5 /USD or Rs 51/USD. I do not see it going significantly below that as those opportunities would be used to buy from people who have un-hedged exposures in short term. In the medium term until there are credible solutions to the euro zone, the rupee will be under pressure. We expect that any dips would get bought into and we would be testing the previous highs that we have made over the last couple of weeks.