Rupee Today

The INR rose to 54.34 today during early inter banking dealing hours.  Much of the rally was supported by strong equities as benchmark indices posted fresh yearly high today. FII inflows have driven local market in recent times. As per data from SEBI, inflows from FII to local equities crossed Rs 1, 00,000 crore mark on Tuesday. It is the second highest inflow in a calendar year ever. As per a report available from BNP paribus, bulk of the FII inflows into India have come from Asia ex Japan and Global Emerging Markets funds – about 55% of total inflows. Despite strong Capital account inflows, the rupee is less likely to see any major reversal of the broader trend as current account remains weak.

………..The Indian GDP data is announced just now with a reading of 5.3%, in line with street expectation. The data is less likely to impact markets as already seen discounted.  From US yesterday, the Q3 GDP came good with a reading of 2.7% despite drop in consumer spending and business investment.

In the global FX market, the Euro and GBP is still strong v/s the US dollar quoting at 1.30 and 1.6045 respectively. Asian currencies were mostly higher today backed by stronger regional equities.

Today, we can expect some swings in USDINR (Spot) with a band of 54.40-54.80 during the remaining hours of the day.