US Dollar Index
The Dollar Index gained around 0.5 percent yesterday on the back of unfavorable economic data from US along with US Federal Reserve beginning its two day meeting in yesterday’s trade. The DX touched an intra-day high of 79.74 and closed at 79.67 on Tuesday. US Core Retail Sales gained by 0.4 percent in September as against a rise of 0.1 percent in August. Producer Price Index (PPI) fell to -0.1 percent in September from rise of 0.3 percent a month ago. The Conference Board (CB) Consumer Confidence dropped by 8.5 points to 71.2-mark in October from 79.7-level in September.
The Indian Rupee traded on a flat note on account of Reserve Bank of India (RBI) monetary policy coming in line with expectations of the market. Further, central bank specification that inflation remains as prime target and measures will be taken to control it supported an upside in the currency. Additionally, rising foreign inflow of funds, cut in MSF along with upbeat domestic market sentiments acted as a positive factor. The Indian Rupee touched an intra-day high of 61.306 and closed at 61.42 on Tuesday.
For the month of October 2013, FII inflows totaled at Rs.13466.70 crores ($2189.10 million) as on 29th October 2013. Year to date basis, net capital inflows stood at Rs.86694.20 crores ($15834.60 million) till 29th October 2013.
From the intra-day perspective, we expect Rupee to trade on a positive note on the back of upbeat global and domestic market sentiments as a result of expectations of delay in QE tapering by the Federal Reserve. Further, measures taken by RBI will support an upside in currency. However, sharp upside in the currency will be capped or reversal can be seen on account of strength in the DX.
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