Pramit Brahmbhatt is CEO of Veracity Group
For the week Rupee continued to trade range bound to slightly weak. For past three weeks the rupee is trading in a thin range and it looks like it will decide its direction after the Lok Sabha Elections. Local equities were in a standstill mode on a weekly basis as it ended this week near previous week’s close. In the first half local equities traded weak as FIIs were seen selling their stocks mainly because of the weak data released this week. Overseas investors sold Indian shares worth 216.3 million rupees and also sold equity derivatives worth 12.18 billion which has forced market to trade weak. But towards the end it recovered after the U.S. industrial production increased more than forecast in March which boosted global equities and helped local equities to recover. The trading range for the Spot USD/INR pair is expected to be within 59.75 to 60.75.
It is recommended to be cautious & Sell USD/INR (Futures) on rise with appropriate stop loss as overall Rupee is expected to appreciate. Pivot Point for the Pair is at 60.30 & below is the Support & Resistance levels.
This week dollar index tried to recover last week’s fall and traded positively with the help of positive data. Also the confidence shown by the Federal Reserve Chairwoman Janet Yellen further helped dollar to trade strong throughout the week. The dollar rose against other major currencies after a better-than-expected U.S. industrial production data released, which suggested that the economic recovery is strengthening, some other data’s also showed positive signs such as (1) Jobless claims edged up by 2,000 to 304,000 in the week ended April 12, remaining near their lowest level since 2007 (2) Manufacturing in the Philadelphia area picked up in April, with the Philly Fed diffusion index rising to 16.6 from 9.0 in March (3) construction on new homes in March rose 2.8% to a seasonally adjusted annual rate of 946,000 (4) Also The Fed’s Beige Book revealed that the U.S economy is painting a good picture which helped dollar index to close on a strong note for the week.
After a two week gain this week gold closed at a two-week low, below the psychological figure of $1,300 an ounce as some better than expected U.S. economic data dented the safe haven appeal. Gold declined immediately after weekly jobless claims data stuck to their lowest level since 2007, and eventually ended below $1,300. Dollar index traded positively this week which further spoiled the prices of gold. Dollar-denominated gold prices often trade inversely to the U.S. dollar.