Rupee may to trade in 54.70-55.00 range today: Nirmal Bang

Nirmal Bang has come out with its report on currency. According to the research firm, in the intraday session the USDINR pair is expected to trade in a range of 54.70-55.00 levels.

The dollar rose against most currencies on Monday in thin trading, and held its gains even after President Barack Obama said a deal was in sight to avert a fiscal disaster that would have meant tax hikes and spending cuts for the world's largest economy. The dollar could come under pressure if a compromise agreement on the U.S. budget is struck as this encourages investors to buy riskier assets, driving flows away from the safe-haven and highly-liquid greenback. Obama said on Monday, the deadline before the U.S. economy goes over the "fiscal cliff", a deal on the budget was within sight but was not complete yet. His comments bolstered other riskier currencies such as the Australian, New Zealand, and Canadian dollars. The euro was down 0.2 percent on the day at $1.3192, with selling accelerated just before the London close. Sentiment toward the euro improved after the European Central Bank pledged to buy bonds of indebted peripheral countries. Positioning data showed speculators sharply reduced bets against the euro in the week ended Dec. 24.

Rupee weakened in yesterday’s session on account of oil-related buying, ending 2012 with its second consecutive yearly fall. Rupee was weighed down by a wide current account deficit and economic uncertainty at home and abroad. For the year, the rupee fell 3.5 percent, although that was only a fraction of its 19.1 percent decline in 2011. Data released just as the market closed showed the country's current account deficit widened to an all-time high of 5.4 percent of GDP in the July-September quarter as export growth slowed more sharply than growth in imports, dragging the balance of payments into the red once again. While challenges remain, investors are hopeful of a mild recovery in 2013, as the Reserve Bank of India is widely expected to start cutting interest rates as early as January, helping the economy recover after growth fell below 6 percent in 2012. The fate of the "U.S. fiscal cliff" talks will drive sentiment in global markets this week, with the U.S. Congress scheduled to meet later on Monday. In intraday session the USDINR pair is expected to trade in a range of 54.70-55.00 levels.

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