US Fed Status Quo Helps Rupee To Rebound

Depreciating INR is one of the major worries Indian equity market has been facing since past one quarter. With INR touching an all time low against the USD there was sort of panic in the Indian markets as the investors were fleeing away. And India being a net importer the impact was seen on all fronts.

However in the past few weeks the RBI has taken some action to help the rupee recover by introducing various measures. This helped the rupee recover from the levels of Rs 68 to touch levels of Rs 63 in the just few days. Now today the Rupee got another booster as the US Fed postponed the QE taper. Everyone on the street was expecting the US Fed to go ahead and cut the bond buying by at least USD 15 billion per month (Out of USD 85 billion). However, everyone on the street was pleasantly surprised as the US Fed maintained a status quo.

While the equity market participants globally were quick to respond talking leading global equity indices to new orbit, the commodity prices also witnessed a sharp appreciation. The most advantageous were precious metals which ended its bearish run to enter a bull phase.

While the commodities and stock gained, USD witnessed a sharp decline against all major currencies. INR also gained a good ground to trade at Rs 61.86 showing an appreciation of 2.40 per cent. We expect the Rupee to continue its upward surge as more and more FII would come back to Indian markets now. However still the experts feel Rs 61 per USD is a key support in near term. Considering the current market scenario we expect the Rupee to touch the levels of Rs 61 and then stabilise in the range of Rs 60-61.50.