Forex Market

DOLLARINR

Dollar opened on Monday on a stronger note and made a high of 46.71 levels but was unable to sustain higher levels eventually closing the

day at 46.49. Nifty also complimented the fall in dollar with the equity index rising by 109 points or 2.21% at 5054 points.

The prime driver of the market was India’s Industrial Production data which rose the most in 22 months. The industrial production jumped

10.4% in August from a year earlier after gaining a revised 7.2% in July. The 10 year benchmark bond yields rose to 7.34% after this news

from 7.27% previously as markets expect demand for capital to rise with rise in Industrial production. The bond yields are expected to rise

further as a number of IPO’s are expected to hit primary markets in coming days. Bond yields made a high of 7.46% in early September,

however we expect yields to breach that high in coming days.

Another key feature that will be affecting the USDINR pair will be breach of 76 levels by the dollar index. The dollar index was quoting at

75.68 in early morning trade on Wednesday.

Overall 46.15 is expecetd to act as a crucial intraday support for the currency pair.