Monday, 06 April 2015 06:00

Rupee remains strong, market waiting for U.S. events

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After three consecutive holidays rupee opens bit high on 61.48, down by 0.05ps.

Rupee holds strong footing even after significant appreciation in dollar against the basket of six major currencies. Dollar index reached near to 95 after the last week European Central Banks announcement of b60 euro easing every month. Easing by EU is good for emerging markets as there could be heavy investment flow.

In this week there are important announcements from U.S. Those events include Core Durable Goods Orders, CB Consumer Confidence, New Home Sales, FOMC Statement, Federal Fund rate, Unemployment Claims and GDP qoq. Except GDP all other events are expected to show positive readings that may further appreciate dollar against its peers.

In this week, among all events market is focused on FOMC Statement. Earlier Fed has hinted its interest in increasing interest rate in near time. But looking at weak inflation data there are less chances of any surprise in this meeting. Major analysts are expecting interest rate hike near around mid 2015. Fed is patient in changing its monetary policy stance until fundamental improves strongly.

On the other side Syriza party has won Greece parliamentary election. There was not seen major market movement after the election result. Alexis Tsipras sworn in on Monday as the prime minister of a new firm, anti-bailout government determined to end nearly five years of tough economic measures. It could fire up investors sentiments across EU but there seems strong hold of EU members and other institutions over Greece that may not allow the new Govt to wipe out all imposed regulations.

After five months seize fire, Russian-backed rebels advanced to encircle a Ukrainian army fort town on Monday that again started the war. Markets are not majorly affected by this event.

Rupee has remained in range of 50 to 70ps for last one week. We may see selling pressure before FOMC Statement comes. Feds comment on economic fundamentals will remain crucial for the currency.


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