Rupee seems commence trading on Tuesday with negative note as Indian consumer inflation in the country increased to 7.34% in September from 6.69% in the previous month as food prices continued to surge, government data showed on Monday. That marked the highest level of inflation recorded since January, and well above the upper end of the RBI's target range of 2-6 per cent.
Industrial Production (IIP) - dropped 8% in August, mainly due to weak activity in manufacturing, mining and power generation.
The rupee resist three days firm run on Monday, declining by 12 pips to close at 73.27/28 against the US dollar. Starting off on a bullish note, the rupee touched the day’s high of 73.0525/625 before hit intraday lows at 73.3150/3250 levels.
Spending to help India’s pandemic-hit economy is likely to face delays after the federal government and some states on Monday failed to agree who should borrow to cover revenue shortfalls.
Importers : - Must cover short term labilities in every dip in tranches.
Exporters : - Wait for bounce or Hedge thru Option strategies.
INTRADAY RANGE - 72.91 ( 73.15 - 73.45 ) 73.72
The dollar flirted with three-week lows as investors stuck to hopes that there will be large U.S. fiscal stimulus after the Nov. 3 election to shore up a pandemic-hit economy, supporting riskier currencies.
A Biden victory is also seen as negative for the dollar partly because his pledge to hike corporate tax would reduce returns from investments in the United States.
Sterling traded above the key $1.30 level as hopes for a Brexit deal offset concerns about pressure on the economy from new coronavirus restrictions British Prime Minister Boris Johnson has announced.
The offshore Chinese yuan nursed losses after China's central bank removed reserve requirement ratio for financial institutions when conducting some foreign exchange forwards trading, a move seen as a bid to curb recent yuan appreciation.
The yen strengthened to 105.34 per dollar while the Swiss franc traded at 0.9102 to the dollar , near its highest in three weeks.
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