Karvy Stock Broking`s view on Rupee

Karvy Stock Broking has come out with its report on currency. As per the research firm, during the day, domestic equities and the month-end dollar demand would give direction to the rupee.

• The Rupee fell on the first day of the week after tracking losses in domestic equities and the Euro. The rupee spot ended the day at 55.97
• Nifty ended majorly lower as European fears engulfed the Indian markets. It lost by 87 points to close the day at 5187 levels
• Dollar index closed higher as Euro continued its fall among fresh fears over Spain. It finally settled at 83.70 level
• The call rate closed lower at 8.00 % as demand for short-term money remained lower
• India’s 10-year yields ended lower in the last trading session, finally ending at 8.06%, down 1 bps

Outlook
Asian stocks took another day of losses, after weaker cues from Wall Street and Europe led to fresh fears of the worsening debt crisis engulfing Spain and other regions of Europe. Italian markets fell nearly 5% yesterday. The euro is also trading consistently below the 1.22/$ mark. After yesterday’s major fall, the SGX Nifty is showing a slight gain of 11 points.

On the economic front, the German and Euro-Zone PMI numbers will be closely watched and could give a direction to the euro. The PMI services and manufacturing are expected to remain largely unchanged but, any deviation from the survey could make the euro volatile. From the U.S, we have the House Price Index which is expected to come in slightly lower and could weaken the dollar in the evening trade.

Today, the rupee is expected to open slightly lower due worsening global investor sentiments. During the day, domestic equities and the month-end dollar demand would give direction to the rupee. Apart from this, any new announcements from the new finance minister during the week could further direct the rupee for the coming days.

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