Rupee has intraday resistance at 54.65: Mangal Keshav.

Mangal Keshav has come out with its report on USDINR. According to the research firm, rupee is expected to consolidate between 54-55, both remains a good support and resistance level on daily chart. 54.25 (200-day SMA, 54.4 (100-day SMA) and 54.65 (20-day SMA).

Indian rupee dropped for the fifth straight day, weakening to its lowest level in 3-weeks, as heavy dollar demand from oil and defense firms offset inflows into the domestic stock markets. India's central bank maintained a status quo ignoring government pressure to reduce borrowing costs, but said it was shifting its focus towards boosting a flagging economy, raising the odds of a rate cut as early as January.

The RBI left policy interest rates unchanged at 8%, ignoring the growing clamor from business and politicians to lower them and also reiterated its October guidance of further policy easing in the March quarter, as it shifts its focus towards boosting growth.

The Reserve Bank has also kept the cash reserve ratio unchanged at 4.25%, its lowest since 1974. In the non-deliverable forwards market, the onemonth contract was at 55.17 while the threemonth was at 55.66.

The benchmark 10-year bond yield was up 1bp at 8.15%, but off highs of 8.18%, after the central bank said it would shift its focus to growth & hopes of more open market operations. India's 1-year OIS rate up 4bps at 7.66% while the benchmark 5-year OIS rate was 3bps higher at 7.13%.

India's overnight cash rate closed unchanged at 8.05/8.1%, with banks' borrowing from the central bank repo window climbing to a new 8- 1/2 month high. The dollar declined, on rising expectations for a deal to avert the fiscal cliff boosting risk appetite and robbing the US currency of its safe-haven appeal.

The dollar index, which measures greenback’s performance against a basket of six major currencies, fell to 79.349, compared with 79.557 in North American trade on late Monday.

The euro rose to an 8-month high against dollar, on signs that US policy makers are moving closer toward a comprehensive debt deal. Central banks in Sweden, Hungary and Turkey has cut interest rates, as the fallout from the euro area’s sovereign-debt crisis dimed growth prospects for some of the biggest economies in its vicinity.

Sweden's central bank has cut its main lending rate, citing a "clear slowdown" in the Swedish economy driven in large part by weakness across the neighboring euro zone. The Riksbank cut its repo rate by a 25bps to 1%.

Technical Alerts-

Rupee-Dollar: Rupee is expected to consolidate between 54-55, both remains a good support and resistance level on daily chart. 54.25 (200-day SMA, 54.4 (100-day SMA) & 54.65 (20-day SMA).


Source : moneycontrol.com