Indian rupee bounced back from near one-month lows on Thursday, halting its slide seen this week, helped by dollar sale by exporters.
The NSE Nov future opened strong and moved higher to 47.75, but rates failed to hold and the pair fell to 47.2725 to close almost at the day’s low on weakness in the dollar globally.
The USD fell during the over night session after the US GDP showed first positive reading in 2009. The growth in the gross domestic product has raised concerns that Fed may become Hawkish in the FOMC meeting due next week and soon end the low rate cycle.
The U.S. economy expanded at a 3.5% annual pace in the third quarter, the Commerce Department estimated Thursday. In the past year, the economy has contracted 2.3%. The economy shrank 0.7% annualized in the second quarter and 6.4% in the first quarter.
The US Dollar index Dec future declined from its intraday high of 76.73, to close the New York session at 76.06. The In the Asian trading session, the dollar index is trading slightly lower compared to previous session’s closing on recovery of the Asian stock indices.
The DJIA closed gaining as much as 2% yesterday supporting the Asian market rally today.
The MSCI Asia Pacific Index added 1.1 percent to 115.97 as of 10:51 a.m. in Tokyo, paring its drop this week to 3 percent.
Japan’s Nikkei 225 Stock Average rose 1.2 percent and the South Korea’s Kospi Index added 0.5 percent. The Nifty Nov future traded on SGX is currently trading up 46.5 points at 4825.
The USD INR spot pair is currently trading at 46.67, down over 51 paise since the previous closing.
Outlook
The USD INR pair is expected to trade lower for the session following weakness in the USD coupled with firm trading in the Indian stock indices.
In the short term USD INR is expected to take guidance from the FOMC meeting due next week. For intraday, we recommend selling the USD INR pair.
Courtesy : JRG Wealth Management Limited
