Karvy Stock Broking`s view on Rupee

Karvy Stock Broking has come out with its report on currency. As per the research firm, European data is expected to come in negative for the currency. Some demand at lower levels for the dollar could also restrict gains for the day.

After hitting fresh monthly high in the morning the Rupee fell on weaker global cues and dollar buying by importers. Weaker Domestic equities also put further pressure on the rupee. The rupee spot ended the day at 55.32

Nifty ended the opening day of the week with losses despite the inflation numbers coming in lower. Weaker global cues continued to hurt the domestic index. It lost by 30 points to close the day at 5197 levels

Dollar index closed higher as demand for safer assets increased. It finally settled at 83.09 level

The call rate closed lower at 8.10 % as demand for short-term money remained lower

India’s 10-year yields ended higher in the last trading session, finally ending at 8.08%, up 2 bps

Asian stocks are trading positive on the hopes of stimulus bets from the US ahead, of the American Fed’s chief Bernanke’s testimony over today and tomorrow. They have ignored the cut in growth forecasts by the IMF and weaker western equities. The euro has also moved above the 1.23$ mark. The SGX Nifty is trading higher by 31 points, tracking other peers. These factors point to a positive rupee opening.

On the economic front, the UK CPI numbers will be closely watched. These however, are expected to remain unchanged at -0.10%. From the Euro-zone and Germany, Zew sentiments are expected to show a decline and could hurt the euro in the afternoon session. From the US, Industrial production and Capacity utilization are expected to show an increase and could support the dollar in the evening trade.

Today, the rupee could open on a positive note, tracking positive equities and a stronger euro. However, we could see the gains remain limited during the day as we expect European data to come in negative for the currency. Some demand at lower levels for the dollar could also restrict gains for the day.

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