Market Outlook

Indian rupee strengthened past 64-mark to hit over two year high against the US dollar after the Reserve Bank of India’s (RBI) cut interest rates by 25 basis points as seen by most economists. Gains in rupee was also supported by continued inflows by foreign institutional investors (FII) in the local equity and debt markets. So far this year, FII’s bought $8.90 billion and $17.51 billion in equity and debt markets respectively.
Although the bond market has factored in such expectation, but the benchmark yield still can fall by another five basis points following the desired cut.

Fundamental News

•    Dollar hovers at 15-month lows vs. rivals, U.S. data on tap.
•    Euro hits fresh 2-1/2 year highs against weaker dollar.
•    UK Construction growth eases to 11-month low in July amid weakness in commercial building.
•    China’s yuan pulls back from 9.5 month high after modest dollar gains.

USDINR

USDINR showed sharp downfall since the start of the session and closed below on weak note.
The currency pair gave negative breakouts on monthly chart and closing below 64.0000 is a weak sign for it. Now, 63.5000 is seen as next major support for it.

1

EURINR

EURINR showed steep downfall from higher levels and closed in red territory.
It was unable to sustain above the mark of 76.0000 and this may cause the currency pair to further drop towards the next support of 75.3000.

2

GBPINR

GBPINR discontinued the previous sessions’ gains and closed on lower note.
On daily chart, 84.2000 is seen as key support for the counter sustaining below which can further drag it whereas 85.2000 is seen as important resistance.

3

JPYINR

JPYINR gradually lowered from the beginning of the session and closed in red.
It faced stiff resistance at higher levels and closing below 57.4500 can further weaken the pair while 58-58.2000 will be seen as resistance range for it.

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