ICICIdirect analyst expects the US dollar upsides to be limited in rallies. ”Utilise pullbacks in the USD/INR March contract to sell. March futures in the range of 66.98-67.08 with target 66.78-66.60.”
There has been considerable increase in investors risk appetite this week and pick up in foreign investor flows which has helped the USD-INR pair to settle near Rs 66.50/USD level, and lot of stoploss orders have been seen around this level. USD/INR can be expected to appreciate gradually from this level and trade near Rs 66-66.80/USD level in near term with next big supports at Rs 66.10/USD and Rs 65.90/USD.
The rupee recovered from early losses to end strong against the US dollar, as investors sold the dollar ahead of a long-weekend amid a late recovery in Indian market. The Indian currency ended the day at 66.64, up 0.11% from the previous close of 66.71.
The better than expected govt borrowing calendar for next year coupled with improved sentiment and expectations of a rate cut from RBI have helped bonds rally sharply. USD/INR uptrend may continue with the 10-year benchmark yield expected to trade in a broad range of 7.45-7.55% till the policy announcement is made.