USD/INR Daily

Dollar continued to trade in a range bound manner as the pair gave up its gains after three days of rise. Dollar Opened the day 46.92 from previous close of 46.71 and fell by 30 paisa to close the day at 46.61. The fall came despite the fact that Nifty closed in red with benchmark index falling by 35 points at 5112 levels. Not much activity was witnessed in currency markets as Dollar index stayed range bound between 76 and 76.5 levels. However yen fell against the dollar after announcement of stimulus package by Bank of Japan. Yield on India’s 10 year benchmark bonds fell for second straight session as they hovered around 7.52% levels. Yields had touched a high of 7.62% earlier this week on expectations that higher inflation will push up government’s borrowing plans sucking up liquidity in the markets. Looking at USDINR we expect currency pair to touch 45.50 levels in medium term (1‐2 months). Right now the pair is moving in a sideways range with
47.20 acting as a resistance and 46.15 acting as a support for the pair. For today the pair is expected to trade between 46.30 and 46.75 levels with a bearish bias.