Dates for the national elections have been declared and the elections are a month away. We had mentioned some time back, that closer to election, Rupee tends to appreciate, as speculative bets on the offshore markets, works in Rupee favour, esp. at a time, when consensus is for a stable government.
We expect, oil marketing companies and also the central bank play an active role in covering forwards exposures and building reserves.With Rupee hovering below 62.00, we can expect some uptick in hedging activity from the importers as well. Therefore, we look forward to a range of 61.00/61.50 and 62.10/30 over the near-term on spot. The key support levels on the pair are: 61.30/40 and 60.70/90 region. Key resistances for traders will be 62.15/20 and 62.50/60. Key events to watch out for the rest of the week are the policy meeting of the European Central Bank and the US Jobs data for the month of February.
By Anindya Banerjee, analyst, Kotak Securities