A pullback was witnessed in USDINR as dollar strengthened against other currencies. Dollar opened the day at 46.04 and made a high of 46.38 eventually closing at 46.32 levels. Nifty which had fallen by 50 points from open recovered and closed the day 4 points positive at 5062 points. The surprise however was total Net TIC inflows of U.S which indicates the total amount invested in American financial assets from people outside
America. The demand for long term U.S. financial assets strengthened in September as Japan, U.K and China added to holdings of Treasury debt. Net buying of long term equities, notes and bonds totaled $40.7 billion for September as compared to net buying of $34.2 billion In August. While in short term securities, foreigners brought a net $133.5 billion for the month. This indicated confidence of global investors in the U.S. This was
reflected in prices of Dollar Index which rose from lows and was trading at 75.28 levels from 74.81 levels. However contrary to previous correlations, Dow Jones and other asset classes rose with DJIA closing 30 points positive at 10437 points. We expect this rise in Dollar index will not have much effect on USDINR pair.46.55 will remain a crucial resistance for the pair while 46.15 will act as a key support. In medium term we expect pair to touch Rs.45/USD.
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