Rupee likely to appreciate
The rupee is likely to test new highs this week. The Indian unit is expected to trade in a 48.35-43 band against the dollar. This would, however, be dependent on any event risk that could affect the markets.
Dealers expect the rupee to remain in a range between 48.35 and 48.40 for most of the week. Due to a strike called by some trade unions on Tuesday, trading volumes would be very low as public sector banks would mostly be out of the market.
Also, as Monday and Wednesday are holidays, there could be a bunched-up effect on Tuesday and Thursday, which could see the Indian unit appreciate.
The 48.40 level, which was held continuously for the past two weeks, was breached on Thursday and this could see the rupee gain to its next level of 48.35.
Some of the factors that the market is watching out for are the Middle-East crisis and any untoward incidents in the country (as was the case last week). Players will also look out for any positioning by the political bosses in the country.
However, the market is unlikely to see a massive depreciation as the overall sentiment is that the rupee will appreciate.
According to senior dealers, the market is now much more sensitive to inflows rather than outflows. A good amount of inflows
