Expect Rupee to trade on positive note: Angel

Angel Broking's report on curreny

The Indian Rupee depreciated around 0.5 percent for second consecutive day in yesterday's trading session. The currency depreciated on the back of geopolitical tensions between Ukraine and Russia. This factor even led to weak market sentiments in earlier part of the trade which exerted downside pressure on the currency.

Additionally, concerns of economic growth in world's second largest economy which is China acted as a negative factor for the Rupee. Also, demand for dollars from state run banks for defense purposes continued with downside movement in the currency. The Indian Rupee touched an intra-day low of 61.29 and closed at 61.22 on Wednesday.

India's consumer price inflation eased more than expected to 25-month low at 8.1 percent in February a rise of 8.79 percent in January. The country's Industrial production (IIP) data rose unexpected by 0.1 percent in January from decline of 0.6 percent a month ago. Manufacturing Output slipped by 0.7 percent in January with respect to earlier fall of 1.6 percent in prior month.

For the month of March 2014, FII inflows totaled at Rs.3523.70 crores (USD 575.46 million) as on 12th March 2014. Year to date basis, net capital inflows stood at Rs.5642.3 crores (USD 929 million) as on 12th March 2014.

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OutlookFrom the intra-day perspective, we expect Indian Rupee to trade on a positive note on the back of decline in retail inflation data yesterday which is at the lowest level in last 25 months. Further, positive industrial production and manufacturing output data from the country in yesterday's trade will support an upside in the currency. Additionally, upbeat market sentiments along with weakness in the DX will act as a positive factor.

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