Exporter selling prevented a sell-off beyond 61.40/60 resistance area. However, weakness in the majors, Euro and Pound against the United States dollar and downtick in the domestic equity markets did not allow the rupee recoup much of the losses.
Over the near-term, Indian rupee is expected to trade within a range of 60.60/80 and 62.00/62.20, as year-end demand from corporates will be closer to 61.00 on spot.
However, run away depreciation is not expected, as speculative inflows continue in the domestic equity markets. FIIs have poured in over USD 3.5 billion over the month of March.
But, volatility will increase, China and Eurasia remain the global stress points.
By Anindya Banerjee, currency analyst, Kotak Securities