Rupee may trade in 56.90-57.35 range in spot: Nirmal Bang

Nirmal Bang has come out with its report on Rupee. According to the research firm, expected range for the pair in spot market is 56.90-57.35.

The Indian rupee fell on Wednesday, staying near record lows, as oil importers stepped up their dollar purchases at the end of the month, while caution ahead of a European Union Summit sapped demand for risk currencies. There was no spot of any central bank intervention in the session after the Reserve Bank of India was widely seen as having sold dollars in each of the four previous sessions. The rupee has also failed to gain traction despite measures announced by the central bank on India to bolster the currency, including raising the investment limits on government bonds for foreign investors. If rupee depreciates further and trades at 58 to the dollar in the next one month, the RBI may come in with more measures. The rupee settled at 57.15/16, compared to Tuesday's close of 57.01/02.Global risk sentiments will also play a key role in determining the rupee's fortunes, especially as European Union leaders meet for a two-day summit starting today. As leaders convene in Brussels trading should be largely dependent on headlines rather than fundamentals or technical, and as such, volatility should be high. Expected range for the pair in spot market is 56.90-57.35.

The euro extended losses versus the U.S. dollar on Wednesday as investors remained cautious ahead of a European Union summit that is not expected to deliver new measures to ease the region's debt crisis. The euro for a third day to hit a session low of $1.2452. With the euro floundering, the dollar index. DXY touched a two-week high at 82.699. The greenback also held on to most of its overnight gains on the yen to stand at 79.75. However, that still left it lower on the week following Monday's near 1 percent slide. Markets will also be keeping a close eye on the outcome of an Italian bond sale. Italy will test market appetite with up to 5.5 billion Euros of five- and 10- year bonds today. The euro stayed on the back foot in Asia today, though its downside was seen limited lest an impending summit of European leaders surprised markets with concrete measures to tackle the region's debt crisis. Market players are not expecting any material developments out of the euro zone summit; we caution that because of the increasingly low expectations surrounding the meetings, a small bit of positive news could go a long way for the euro in the short-term.

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