USDINR
Dollar ended in red for the fifth consecutive session as the pair touched the lowest level in past one year. Dollar opened the day at Rs.
46.50/USD around 20 paisa down from Wednesday’s close of 46.70 and made a low of 46.25 before closing the day at 46.39.However
according to RBI’s deputy Governor K.C Chakrabarty it was only the volatility and not the trend that was a concern to RBI.
Internationally European Central Bank and Bank of England kept their interest rates unchanged at 1% and 0.50% respectively. ECB outlined
a fractionally more upbeat picture of European economy but emphasized that outlook remains uncertain and offered no hint when bank
might raise interest rate. However the impact on international currencies was negative as dollar fell against the euro and yen after Fed
Chairman Bernarke said that bank is ready to tighten monetary policy once the economy improves.
In India the Finance Minister in an interview stated that India’s budget deficit which stood at 6.8% of the GDP was unsustainable and
needed to be slashed to 4% by 2012. In money markets the bond yields fell to 7.20% from 7.28% the previous day .
Overall we expect USDINR to consolidate after five days of fall with key resistance seen at 46.50 and support at 46.26.
