Indian rupee opened lower last week because of strong demand of US dollar and widening Indian fiscal deficit.
In-spite falling crude oil prices, which has helped limit Indian import bills, the sharp rise in imports of gold has widened Indian trade deficit to USD 13.4 billion in October against USD 10.6 billion last year.
Experts believe that Indian rupee has resistance level of 62.5 in near term subject to Indian economic reforms. The markets would be closely watching parliament’s winter session, which starts today, for strong reforms by newly appointed government .
Rupee has immediate resistance at 61.70; the short term strength in rupee is expected to keep it in the range of 61.5-61.7 per USD. For medium term, rupee seems to has resistance level of 62.70 due to falling Yen and Euro against USD.
“Ideally, rupee should stay in level of 61.5-62.5 per USD for next few weeks. Government’s economic reform policy will play a major role in deciding the direction of Indian rupee. Also, with festival and wedding season on verge of coming to an end will restrict imports of gold, which contributes a major part of Indian ports,” said Mr. Agrawal, a currency analyst based in Mumbai .
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