High volatility in asset classes across the globe did show its affect on USDINR pair as the currency pair touched 46.50, registering a smart
recovery of 70 paisa in a matter of one week after making its low of 45.82. Although internationally dollar index was quoting below 75.50
level mark, the rise in USDINR indicates a breach of correlation from the international currency markets briefly. The EURUSD pair traded
near 1.50 after reports showed improvement in U.S leading indicators and German Business confidence. However American equity index
the Dow Jones closed down by 92 points at 9949 after selling was witnessed in computer related stocks lead by IBM.
Bearishness in equity markets was partly responsible for rise of USDINR with Nifty falling by 50 points to close the day at 5063 levels.
However the main concern for USDINR continued to be higher oil prices. Crude oil in NYMEX breached the $80 mark and was quoting at
$81.37/barrel. Rise in crude oil prices is expected to affect Rupee as costs of Imports is expected to rise leading to increase in trade deficit.
Also higher crude oil prices will lead to rise in inflation which will trigger rise of interest rates by the central bankers.
Overall we feel 46.45 as a very crucial level for the pair on intraday basis. As long as USDINR trades above these levels one can go long in the
pair.
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