INR forecast: INR opens at 73.80 as against yesterdays closing of 73.83 and may trade the day between 73.50-74.00 under two way price action.
INR is seeing good support from local data releases- CPI and now benign trade deficit ( although a low reading is counter intuitive). Yesterday India’s trade deficit figure’s were out which surprisingly came well above market expectation. Owing to rise in oil price, trade deficit were expected to widen by USD2-4 Bn., but actual figures came to 5 month low at USD 13.98 Bn from previous USD 17.49 Bn. Exports for last months accounted to USD 27.95 Bn. Vs. imports of USD 41.9 Bn. Oil import remained little changed around USD 10.91 Bn.
US retail sales came lower and led to mild sell off in USD. Today Asian equity are flat and there was a sell off in last few minutes. Turkish Lira rose to two months high against USD after Turkey released U.S pastor who was detailed last December by Turkish official over suspicious for spying.
For next few days the range could be 73.10 to 74.50. First two weeks of Nov are full of events and would suggest to cover the risk using options .