On a weekly basis, the US Dollar Index (DX) weakened sharply by 1.7 percent last week, mainly after the Fed’s decision to keep interest rates near zero through at least 2014 and left the door open for a third round of quantitative easing in order to boost the growth. This affected demand for the low-yielding dollar.
The index touched a low of 78.89 and ended its trading session below the crucial level of 80-mark in the last week.
Dollar/INR
The Indian Rupee (INR) appreciated sharply by 1.7 percent in the last week, mainly taking cues from rise in domestic equities coupled with weakness in the US dollar. Additionally, increasing capital inflows in the country also acted as a positive factor for the currency last week. The INR hit a high of 49.30 and closed its trading session at 49.39-mark on Friday.
Outlook
The Indian Rupee is expected to trade with a depreciation bias today, on account of rise in risk aversion in the global markets coupled with a stronger dollar.
Courtesy: Angel Broking
