USD/INR DAILY

Dollar

The much awaited monetary policy was declared by the RBI yesterday which hinted that the central bank will look forward for raising the rates in coming days. RBI governor D. Subbarao also stated that monetary policy’s first priority would be to contain the inflationary expectation which is expected to touch 6.5% by March 2010.Policy Rates like REPO, Reverse REPO as well as CRR were left unchanged but SLR(statutory Liquidity Ratio) which is minimum required investment by banks in government securities was raised from 24% to 25% of deposits. Also some steps towards rolling back of easy money policy was taken when it terminated credit refinance limits extended to banks against loan give to exporters and mutual fund companies.
The net effect of this decision was weakening of the rupee against the Dollar with the pair breaching the 47 mark and closing at the same levels while equity markets tumbled by 124 points to close the day at 4846 levels. Bond yields fell on expectation of higher inflows from banks with 10 year benchmark yield quoting at 7.32% from 7.45% previously. We continue to be bullish on the pair with USDINR expected to touch 47.25 levels . 



                              Pivot             Support1    Support 2   Resistance 1      Resistance 2
Spot                       46.90           46.78         46.64             47.04                   47.15
Nov. Future          46.99           46.89          46.77            47.11                   47.21