Rupee to strengthen more, see resistance at 61.8/$: Axis Bk

The rupee on Tuesday appreciated to around 62.02/USD during intraday trade. Speaking to CNBC-TV18 on the possible reason for the appreciation, Ashok Gautam, senior VP and head, Global Markets, Treasury, Axis Bank says the immediate move in the currency is due to dollar selling in the market. Going forward, he believes 61.80/USD will prove to be a good resistance, which if held, can take the rupee to 61.20/USD.

Also Read: See near-term range for rupee between 62-63/USD: HDFC Bank

Gautam also mentions that the Indian currency is on a strengthening spree. Going forward, with the support of measures taken by both the government and the Reserve Bank of India, the rupee can appreciate from its current levels though not past 60/USD, he adds.

Below is the verbatim transcript of Ashok Gautam’s interview on CNBC-TV18

Q: To what would you attribute this intraday move that we have seen on the currency and where do you see it headed now?

A: Since last few sessions, we have been seeing a move where rupee has seen some strength but the immediate move that we have seen is seeing some kind of dollar selling in the market which has prompted rupee to go below 62/USD.

Going forward, we believe that 61.80/USD could prove to be a good resistance and if that resistance is taken then rupee could gain further to about 61.20/USD or so. But on the uptick 62.20 and 61.80 per dollar would be my range for the day.

Q: For a slightly longer term, what is your likely trajectory for the currency going forward?

A: Now, the sentiment seems to be driven by what else is happening in China as well as in the US. At both the places, the events that we have seen over the last few days seem to be pointing towards the rupee’s strength. In view of that, my view would be that rupee certainly would be on a strengthening trajectory.

Q: Do you see the currency retesting levels of 63/USD plus that we had seen just a few days back?

A: I have my doubts whether those levels will be seen again so soon. If 61.80/USD resistance is breached then probably it will be some time before we see the levels which you talked about.

Q: In terms of gaining further ground where do you think big resistance will come, do you think the currency will have strength to go past 60/USD if easy liquidity continues?

A: Right now, I am not able to see it going towards 60/USD in the immediate future but certainly the steps that are been taken both on the current account deficit and on fiscal side, also, the kind of views that are emerging from both government and the Reserve Bank of India could auger well for the rupee. I am sure that going forward rupee will continue on this strengthening spree, but below 60/USD, I have my doubts because these levels for rupee are very good levels.

Q: Do you believe there will be no RBI intervention in the markets?

A: I have not seen that, I have only seen some kind of dollar selling but no RBI intervention.