The rupee (INR) posted a half per cent loss last week against the dollar (USD) as it ended the week at 75.95 versus the preceding week’s close of 75.57.
Today, the Indian currency opened at 75.69, about 0.35 per cent higher against Friday’s close. A further rally will face a hurdle at 75.6. This level is critical, a breakout of which can result in a sharp rally. But if the rupee weakens from the current level, the nearest supports are at 75.8 and 76.
Foreign Portfolio Investors (FPI) remain sellers for the current month as well, following substantial selling in the past two months, though the amount of selling has come down. According to the latest data by the National Securities Depository Ltd (NSDL), the net outflow of FPIs stands at ₹9,275 crore (equity and debt combined) so far this month. If this trend continues, the rupee could experience constant downward pressure.
Foreign reserves
The weekly statistical supplement released by the Reserve Bank of India last Friday showed that foreign reserves went up between May 8 and May 15. As per the report, the total reserves increased by $1.7 billion i.e. it increased to $487 billion from $485.3 billion. Foreign Currency Assets (FCA), the largest component of the reserves, increased by $1.1 billion to $448.6 billion from $447.5 billion. The value of gold holdings increased marginally to $32.9 billion, compared to the preceding week’s $32.3 billion. The build-up of reserves is a huge positive for the local currency given the amount of uncertainty, which poses the constant threat of a possible spike in sell-off.
Dollar index
The dollar index closed slightly lower last week at 99.86 versus its previous week close of 100.4. But the index has been in a sideways trend over the past two months, moving within 98.8 and 101. The consolidation phase is likely to be extended and the index should breach either of these levels to establish a trend.
Trade strategy
The currency pair have consolidated between 75.6 and 76 for the past few weeks. As the rupee is now trading near the resistance level, it is likely to slide lower. Hence, for intra-day, traders can sell the Indian unit with stop-loss at 75.5
Supports: 75.8 and 76
Resistances: 75.6 and 75.4
Thank you for being a loyal user of Portfolio.
Portfolio will be a paid section hereon.
Please Subscribe to get access to one of our early bird packs.
Or click on Free Trial to get 14 days free trial.
What You'll Get
-
Web + Mobile
Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device.
-
Exclusive Portfolio and Investment Advice, Banking, Lifestyle and Specials
Get diverse set of perspectives from our trusted experts on Portfolio, Banking, Economy, Environment and others.
-
Ad free experience
Experience cleaner site with zero ads and faster load times.
-
Personalised dashboard
Customize your preference and get a personalized recommendation of stories based on your interest.
Published on
May 26, 2020
A letter from the Editor
Dear Readers,
The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.
Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.
In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.
We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.
But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.
I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.
A little help from you can make a huge difference to the cause of quality journalism!
Sincerely,
Support Quality Journalism