Rupee likely to trade in 56.20-56.60 range: Nirmal Bang

Nirmal Bang has come out with its report on rupee. According to the research firm, The range for the day is likely to be 56.20-60.

The Indian rupee fell for a second successive session on Wednesday to near a record low, as oil importers ramped up demand for the greenback ahead of the end of the month, while global risk assets were hit by worries about Spain. The partially convertible rupee settled at 56.23/24 per dollar, which marked a record closing low, and was not far the all-time low of 56.40. India's move to allow foreign retail investors to buy up to $1 billion in local corporate bonds on Tuesday was seen as too mild to significantly bolster capital inflows and support the shaky rupee. Today, we are looking ahead at gross domestic product data, with India expected to say its economy grew at 6.1 percent in the January-March quarter, the slowest in almost three years. The rupee is likely to continue weak today against the US dollar as the risk aversion intensifies globally. Moreover, importers’ buying would continue to push USDINR up. The range for the day is likely to be 56.20-60. However, traders should keep an eye on any RBI intervention. The euro saw biggest drop in at least eight months as increasing likelihood of Spain needing outside assistance to fix its public finance and banking system led to a major escalation in the perennial crisis in the currency bloc. Spanish government bond yields surged to a six-month high while German bond yields fell to record lows, pushing the spread between the two to a new high, adding stress to markets already frayed by the anxiety Greece may leave the euro zone. Italian debt yield also rose above six percent for the first time since May while traders also warily look at whether the Irish will support Europe's new fiscal treaty as expected in a referendum on Thursday. With investors trying to escape the euro zone and to hoard liquid assets, the dollar's index against a basket of currencies rose to 20-month high of 83.11 The dollar fell to as low as 78.71 yen, its lowest in 3 1/2 months, as investors favoured the yen, the currency of the world's largest creditor nation despite a mountain of its public debt. 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