After three weeks of strong rally, the Indian Rupee seems to be losing momentum. Rupee futures contracts traded on the National Stock Exchange (NSE) started the week on a positive note by extending the rally against US Dollar (USD), Euro (EUR), British Pound (GBP) and Japanese Yen ( JPY).
However, the weakening of the US dollar against the marches reversed the lower rupee against them in the second half of the week. The USDINR January Futures contract made a low of 73.8775 and bounced back from there to close at 74.21 on Friday, up -0.34 percent. Rupee lost the most against the Japanese Yen last week. The JPYINR January Futures contract on the higher NSE reversed sharply from the low of 64.0950 and ended the week 1.21 percent higher at 65.15. The sharp fall in the USDJPY pair from around 115.85 to 113.50 helped the Yen strengthen against the rupee in the domestic market.
Similarly, with the euro breaking above 1.14 and rising to a high of 1.1480 and the Pound rising below 1.36 to reach a high of 1.3750 in the past week it has also pushed those currencies against the Rupee higher. . The EURINR and GBPINR pairs were up 0.9 and 0.96 percent, respectively, last week. However, the majors bounced back some of their gains in the US sessions on Friday after the strong bounce in the dollar index from a low of 94.63 to a high of 95.27.
So, Rupee futures contracts may see a pullback in the coming weeks when the market reopens on Monday. However, on the charts there seems to be limited space left to strengthen the Rupee in the future. Therefore, any reductions in the USDINR, EURINR, JPYINR and GBPINR futures contract in the coming days may be short – term and may lead to further increases.
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January 15, 2022