21st August: Indian rupee report for exporters and importers

Insignia Consultants

New Delhi

www.insigniaconsultants.in

 

Tuesday, August 21, 2012

 

 TIME 09:10 AM IST                          

 

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INDIAN RUPEE REVIEW AND OUTLOOK

 

Month end demand will prevent rupee to gain in a big way against the US dollar. The holidays are over and there will be demand of previous week.  The government has decided to start another round of reforms from next month which will include divestment and opening of the left over sectors of the Indian economy to foreigners. August monsoon rainfall has reduced government worries of severe drought but we still need two more weeks to get clear picture.

 

Overseas investment into Indian stock markets has crossed USD 11 billion so far this year, with more than USD 1 billion being pumped in this month alone. Foreign institutional investors (FIIs) have infused a net amount of USD 1.02 billion (about Rs 5,692 crore) in August so far, taking the total for this year to USD 11.4 billion (Rs 57,958 crore) in Indian equities, according to the Securities and Exchange Board of India (Sebi).

 

Overseas investors are cautiously bullish on India. However unless foreign direct investment increases in India the medium term outlook on the rupee will be cautious.

 

USD/INR

Rupee needs to break 55.78 else it will trade in 55.2500-55.7500 range. Demand is there at lower prices so I do not expect a big crash today.

 

Key support: 55.48

Key resistance: 55.78

 

Exporters: Use a trailing stop loss of 55.25 on the near term receivables.

Importers: Use a trailing stop loss of 56.05 for the near term payables.

 

EURO/INR

 

Euro-rupee should trade in 68.15-68.98 wider range.

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Exporters: Use a trailing stop loss of 68.10 on the near term receivables.

Importers: Use a trailing stop loss of 69.10 for the near term payables.

 

Forward Premiums

 

Forward premiums should remain firm today and fall tomorrow. However one year forward premium should fall to 335 paisa from the current 342 paisa.

 

 

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees  have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice.

NOTES TO THE ABOVE REPORT

PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS

ALL PRICES IN INDIAN RUPEES UNLESS OTHERWISE SPECIFIED

 

 

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