The Indian Rupee traded strong, taking cues from Dollar inflows into local debt market and positive Indian equity markets. Equity markets continue to trade bullishly and are up by 18% this year on FIIs buying of nearly $ 4.4 billion. More capital inflows are expected in India as most of the policies have been formed to attract them and moreover investors are finding growing India the safest bet to play on. Expect Rupee to breach 49.00 levels in the coming days. Exporters are losing out in the spot market as Rupee is strengthening, to minimize their losses they should sell in the futures market.
Expect Rupee to trade within 49.00 – 49.50 levels. It is likely to breach 49.00 levels in next week on FIIs buying in Indian markets, though Dollar demand from oil importers will restrict the Rupee gain, once it falls below 49.00 levels then the major resistance for Rupee is at 48.50. Euro is also set to trade strong against the Dollar after the approval of bailout package, which will help Rupee to appreciate against the greenback.
After a four week fall the Dollar index, which tracks its performance against a basket of major currencies, traded bullish this week. As US Housing Starts, Building Permits and Jobless Claims showed positive figures adding more to the view that the world’s largest economy is recovering. Also Euro traded weak against the Dollar as the investors were still waiting for Greece to receive the bailout package and avoid the default. British pound gained this week against the Dollar on the slowdown of inflation rate.
Gold traded positively this week on the hopes that the Greece will receive urgently needed bailout and will be able to pay their creditors before the said date, March 20. After a two week fall Gold gained this week.