Rupee likely to weaken further

The Indian rupee, in the shortened week, depreciated 24 paise or 0.47 per cent against the US currency.

“The Indian currency markets witnessed one of their shortest trading days in the week. The rupee, on the very first day of its trade, opened on a strong note, but pared gains on the very same day and weaken on the last day,” Mr Pramit Brahmbhatt, CEO, Alpari Financial Services (India) Pvt Ltd, said.

“Bunched up FII inflows due to short trading schedule and weakening dollar aided the rupee for a strong opening. The prices then pared gains on weak Q3 Balance of Payment numbers and extended their weakness on the last day also due to fall in domestic stocks,” he said.

Mr Brahmbhatt added that the dollar weakened on strong PMI numbers from the developed economies as investments moved out of safe haven to riskier assets on growing optimism of global economies and a strong PMI numbers indicates expansion of the economic activities.

“The rupee, which has been weakening, is expected to weaken further on the rising crude oil prices, which have been consolidating at higher levels raising the average cost of crude oil imports,” he commented.

“The weekend witnessed some weak economic numbers from US employment over non-farm payrolls and sharp declines in euro, which helped the dollar recover from its lows. Further gains in dollar shall weaken the rupee and a move above 51.70 shall target 52.00 and 52.30 levels,” he said.

“The price is being resisted by the 50 per cent level of Fibonacci and any further advances above the same shall test the 68.2 per cent levels. The pivot point is at 50.50 and a successive move below the same shall test 50.00 and 49.90 levels, which shall be good long—term buying chances. The 51.70 level is the near term resistance a move above the same shall test 52.00 levels,” Mr Brahmbhatt added.

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