Rupee inched up on expectations that a revival in foreign equity inflows will bolster the local unit. U.S. Dollar continued to lose ground on majors in further reaction to the Federal Reserve plan to buy US long term bonds, and purchase of mortgage backed securities. The FOMC decision to instill quantitative easing has eroded the attraction to the USD as a proxy for safe haven. In other data US Jobless clams fell by 12K to 646K over the last week whilst the Philly Fed survey improved to 35 from its previous reading of 41.3 for the month of March, indicating a deceleration in contraction of the manufacturing industry. In other news the IMF cut its global growth forecasts with views that the world economy will contract between 0.5% and 1% throughout 2009.
Technical Outlook:
USDINR chart pattern shows a small downside correction for the day. With the trading range between 49.85-50.27 levels. With good support seen at 49.80 levels and key resistance is seen at 50.32 levels for the day. Stochastic is seen trending down and the currency is expected to test the lower bollinger level of 49.85.But caution required as market trading at oversold area.
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