is CEO of Alpari FinancialServices (India)
The rupee traded positively last week after a three week fall. the USD/INR pair traded bearishly and made a low of Rs 48.64 taking cues from the strong local equities and EUR/USD which were trading bullish as global equities were trading in a range bound movement. The rupee traded strong last week and managed to restrict a further dollar gain. However the USD/INR pair made a high of Rs 49.78. The crucial support for the pair is at Rs 48.80.
The dollar index, which tracks its performance against a basket of major currencies, traded range bound to bearish for the week, but in the second half it managed to recover and close on a high. The EUR and GBP also traded range bound to bearish last week against the mighty dollar. Incidentally, the EUR had fallen for the second consecutive week.
European leaders are divided over how to handle Greece’s debt crisis. Stocks fell as an official said that the European Commission is resisting a push to impose bigger write downs on bank holdings of Greek government debt than those agreed at a July 21 summit.
Looking towards the global scenario we can expect the EUR and GBP to bounce back against the dollar, which will help the rupee to appreciate and drop below Rs 48.80 levels.
Gold declined for five sessions out of six as the dollar’s rebound eroded demand for the metal as an alternative investment. Further concerns that the global economy will falter drove equities and raw materials lower. Crude oil fell in New York, heading for the biggest quarterly drop since 2008, on concerns that Europe’s debt crisis will linger on rising US stockpiles.