The Indian Rupee opened at 55.09 levels after closing at 54.95 levels. The Intraday range for the rupee is expected between 54.90 - 55.20 levels.
The Asian markets are trading higher as the yen dropped before the swearing in of a new pro-stimulus government. Japan’s incoming Prime Minister Shinzo Abe, whose Liberal Democratic Partywon a landslide victory in the Dec. 16 election, is scheduled to appoint a cabinet today after the lower house names him premier.
Liquidity will be extremely thin and we believe that currencies will consolidate as many parts of the world some markets will also be closed for Boxing Day on Wednesday. As a result, there's very little economic data scheduled for release this week.
The U.S. lawmakers and President Barack Obama are on Christmas holiday and the talks were unlikely to resume until later in the week. The House of Representatives Speaker John Boehner failed to gain support for a tax plan at the end of last week, raising fears that the United States may face the "fiscal cliff" of some $600 billion in automatic spending cuts and tax increases set to start on January 1.
With the exception of the U.S. fiscal talks and stability in Euro Zone there is no particular issue that could dampen investor sentiments.
Outlook: Exporters cover partially around 55 plus levels, while Importers cover on dips around 54.55 - 54.60 levels who missed the levels of 54.10 - 54.20. Overall: USD/INR Bullish
EUR/USD: The EUR/USD is currently trading stronger at 1.3180 levels. The Euro is trading on a flat note against the US dollar as markets were closed on account of Christmas holidays. However, if the US succeeds in striking an agreement on fiscal cliff, the currency which will benefit the most will be the Euro. The ECB and the EU have succeeded in reducing the risk of the sovereign debt crisis to some extent by helping the debt ridden nations as and when they needed the aid. This week’s economic reports and the outcome of the fiscal cliff talks will be significant for the Euro. Support is at 1.3068 levels, and the resistance is near 1.3310 levels
GBP/USD: The Pound is trading weaker at 1.6118 levels as investors feel safety in the greenback amid fears that thepolitical differences may hold up fiscal reforms in the US, which might lead to a possible recession. The pair is expected to find a support near 1.6050 levels and the resistance is near 1.6300 levels. Overall in a range with bearish bias.
USD/JPY: The yen is currently trading at 85.20 levels. The yen is trading close to its 20 month low against the US dollar as the incoming Prime Minister of Japan, Mr. Abe is likely to push the central bank to take efforts to get the economy out of thedeflation phase. He has also called for a 2 percent inflation target to beat deep-rooted deflation. The currency is poised to complete a third monthly decline versus the dollar, the longest losing streak since August 2008. Near term support is at 82.50 levels and the near term resistance is at 87.00 levels. The yen is weakening towards 84-85 levels as expected.
AUD/USD: Australian dollar is trading at 1.0367 levels. With markets in Australia are closed for the holiday the Australian Dollar was trading flat against the US dollar. Near term support is seen at 1.0290 levels while immediate resistance is at 1.0588 levels.
Gold: Gold is trading at $1654 levels. The gold prices are trading lower amid uncertainty over US fiscal cliff. Near term support is at $1647 levels, whereas strong resistance can be seen near $1670 levels. Look for further dips to initiate buys.
Oil: WTI Crude is trading at $89.09 levels. Support is at $88.10 levels, whereas strong resistance can be seen near the $90.35 level. Overall range bound.
DI: Dollar index is trading lower lower at 79.71 levels. The US dollar is trading higher against its majors on account of risk aversion, due to delay in the fiscal cliff agreement. On the data front, US will release the HPI data and the Richmond Manufacturing Index today. Strong near term support seen near 78.90 levels and the resistance is at 80.20 levels. Overall the index is bullish.
(Source: Corporate Communications, India Forex Advisors Pvt. Ltd.)
cityairnews
Dec 26, 2012 12:30
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