Rupee opened bit higher today at 61.78 against yesterday close of 61.73 as dollar remains strong against major currencies.
Yesterday ECB officials revealed that if needed the Central Bank may go for further stimulus by purchasing Sovereign Bonds. Expectation of further stimulus weakened euro and traders increased holdings in dollar.
Expectation of announcement of snap election by Japan PM Shinzo Abe has also strengthened dollar. Abe is expected to make election announcement in near time and will continue his policy reforms. More stimuli from ECB may support its trade partners on this expectation Japanese shares regained some level after losing near to 3pc on poor GDP data.
Rupee is depreciating for last three trading sessions even after better than expected inflation data. Yesterday Ministry of Statistics released Trade Balance data that reported little fall in import and also in exports. Import increased at 39.44b against last 43.20b rupees while exports increased at 26.09b against last 28.90b rupees making trade deficit of 13.35b rupees compare to last 14.25b. Increasing import of gold in last quarter has become a matter of concern and government is planning to increase curb on gold imports.
Rupee is reacting more on overseas market changes. We may see weakness in rupee until there come heavy inflow in Indian market or dollar fell against major currencies. At present scenario rupee may remain in the range of 61.40 to 61.85, above 61.85 we may see rupee in 62.00 to 62.25 range.