30 Aug, 2010, 02.08AM IST,
Rupee seen crossing 47.00-mark this week
Rugved Dhumale, AVP, Risk Management Solutions, Mecklai Financial
We are likely to see a weak rupee this week as well. A slew of negative economic data from the US over the last fortnight is likely to continue, causing global risk appetite to recede. As the possibility of a double-dip recession in the US is becoming stronger, FII interest in domestic markets is expected to be subdued.
Locally, we have seen inflation at high levels, causing the market to increasingly expect another round of mid-term rate hikes from RBI. However, given global risk-aversion, we are unlikely to see any significant increase in FII demand for Indian bonds.
The first-quarter corporate results were also lacklustre, making domestic stocks appear that much more expensive. All these factors are likely to play against the rupee in the coming days. However, there are also some big-ticket IPO/FPO deals in the next couple of months which may attract dollar inflows into the market.
This, along with ECB related inflows, is likely to provide some buffer against significant weakness in the rupee. Also, fundamentally, the Indian economy is back on track, with growth expectations being revised positively by key stakeholders.
This should also provide long-term support to the rupee. We can expect the rupee to cross the 47.00-mark this week.
Rupee seen crossing 47.00-mark this week
Rugved Dhumale, AVP, Risk Management Solutions, Mecklai Financial
We are likely to see a weak rupee this week as well. A slew of negative economic data from the US over the last fortnight is likely to continue, causing global risk appetite to recede. As the possibility of a double-dip recession in the US is becoming stronger, FII interest in domestic markets is expected to be subdued.
Locally, we have seen inflation at high levels, causing the market to increasingly expect another round of mid-term rate hikes from RBI. However, given global risk-aversion, we are unlikely to see any significant increase in FII demand for Indian bonds.
The first-quarter corporate results were also lacklustre, making domestic stocks appear that much more expensive. All these factors are likely to play against the rupee in the coming days. However, there are also some big-ticket IPO/FPO deals in the next couple of months which may attract dollar inflows into the market.
This, along with ECB related inflows, is likely to provide some buffer against significant weakness in the rupee. Also, fundamentally, the Indian economy is back on track, with growth expectations being revised positively by key stakeholders.
This should also provide long-term support to the rupee. We can expect the rupee to cross the 47.00-mark this week.