USD/INR DAILY

Dollar fell by 43 paisa from high on Friday as equity market continued their upward momentum amid high liquidity in the economy. USDINR November futures opened the day at 46.78 and made a high of 46.80 before closing the week at 46.37. Equity markets also strengthened with Nifty closing 43 points up at 4998 points. Yields of 10 year bonds fell marginally after auction of Government Debt on Friday. RBI sold Rs.100 billion (Rs.10,000 Cr.) of government bonds maturing at various time intervals at yields lower than expected by the traders. This signal of ample liquidity increased sentiments in equity markets, the effect of which was seen in USDINR. After a recovery on Thursday, Dollar index fell on Friday after President Obama began his tour of Asia amid speculation that he will force China to revaluate the yuan. Another key reason for the fall of dollar index was fall in Consumer Confidence in U.S as data indicated that consumer confidence has fallen from 70.6 to 66.0. Looking at today’s scenario we expect dollar to open gap down with 46.15 acting as a crucial support. In medium term we expect USDINR to touch Rs.45.00/USD.