USDINR may trade in 54.70-55 range: Nirmal Bang

Nirmal Bang has come out with its report on USDINR. According to the research firm, as investors focused on the meetings of the central banks of Japan, Britain and the euro zone for signs of more policy stimulus, while solid U.S. economic data underpinned the dollar. The USDINR pair is expected to trade in a range of 54.70-55.

The Indian rupee strengthened on Wednesday as a global risk rally boosted Asian currencies and shares, but persistent dollar demand from oil firms prevented sharper gains.

European stock markets rose to their highest since the 2008 financial crisis on Wednesday, while the Dow Jones Industrial Average hit a closing record high on Tuesday as central banks in the United States, Europe and Japan are expected to keep accommodative monetary policies. The broad risk rally helped spark demand for the rupee from foreign funds looking to invest in Indian stocks.

There are inherent fragilities in INR like high current account and fiscal deficits, dependence on capital inflows, inflation and low growth. So Rupee appreciation is does not seem sustainable. Investors expect that the Reserve Bank of India may cut interest rates at its policy review on March 19.India will unveil industrial output and inflation data next week, which will be critical indicators ahead of that decision.

USDINR is likely to open higher compared to its close of 54.7150/7250 tracking a retreat in Asian risk assets after two days of gains. Asian shares fell after two strong days of gains on Thursday, as investors focused on the meetings of the central banks of Japan, Britain and the euro zone for signs of more policy stimulus, while solid U.S. economic data underpinned the dollar. The pair is expected to trade in a range of 54.70-55.00.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment

Read More