INR forecast: INR opens stronger at 72.06 as against yesterday close of 72.30 and may trade the day mixed between 71.90-72.30. For last few days, we are seeing positive inflow in equity and bond markets and. this is keeping INR weakness under check.
Many positive factors for INR – fall in USD; continued side in crude and market talk of resolution of issues between RBI an Government.
Today India’s trade deficit is scheduled to be publish later in the day. A poor reading may be discounted as market may expect the reading to improve with slide in crude prices.
For perspective, in March INR was at 65 and crude was also around 65. The main weakness in INR are because of rising trade deficit and trade wars. Now that crude has settled, INR may have more correction left. Political uncertainty would start playing out after State election results are out – Dec 11