Indian rupee hits another 8-month high against US dollar

Mar 25 2014, 22:25 IST
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Some of the large exporters tend to prefer the last few days of the quarter to hedge forward. Reuters Some of the large exporters tend to prefer the last few days of the quarter to hedge forward. Reuters
SummaryToday the Indian rupee scored another 8-month high against the US dollar and settled around 60.45/46 levels on the spot.

Today the Indian rupee scored another 8-month high against the US dollar and settled around 60.45/46 levels on the spot. Bunched up selling from large exporters did not allow the rupee to weaken beyond 60.60/61 levels against the United States dollar on spot and as a result, the pair remained bracketed between 60.44/45 and 60.55 for the entire day.

Weakness in the Euro and Pound, against the US dollar could not derail the strong bullish trend in the rupee. Tomorrow being the last day for exporters and importers to book/convert their FCY receivables or payables in FY14, we can expect further selling interest from the large exporters.

Some of the large exporters tend to prefer the last few days of the quarter to hedge forward. This is primarily done to avoid reporting any significant mark to market difference in their books of accounts. Therefore, we expect rupee to remains supported and can even rally towards 60.00/60.20 levels. We believe INR 60 to USD is going a key level for the rupee bulls, as a sustained trading below that can expose stop-loss orders in the US dollars.

Our preferred range for the next couple of days remains 60.00/60.20 to 60.80/60.90. However, in case the pair sustains below 60.00 handle, then it can eye for 59.50/30 levels.

By Anindya Banerjee, analyst, Kotak Securities

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