Forex

Forex daily fundamental outlook: USD, EUR, INR (November 17, 2009)

Contributed by Angel Broking

By Angel Broking

USD:

- The Dollar Index weakened sharply as a rise in risk appetite led to decreased demand for the low-yielding currency. The US Fed Chairman Ben Bemanke repeated in his statement yesterday to keep interest rates low for an extended period.

- But he acknowledged that the slump in the currency was raising asset prices. He also added that the Fed is attentive to changes in the dollar's value and will help ensure that the dollar is strong in the long-term. But this statement failed to provide any support to the currency.

- We expect the dollar index to bounce back today as technically support may lead to a bounce back in today's session.

EUR:

- The Euro advanced against the dollar on Monday as a rise in risk appetite led the currency higher. Also sharp weakness in the currency helped support a further upside in the Euro.

- The currency touched a high of 1.5015 but closed below the crucial 1.50 mark yesterday. It continues to struggle around this crucial level and further boost in risk appetite could take the currency higher.

- The Euro will take cues from the risk sentiments in the financial markets. We could witness slight weakness in the Euro today.

INR:

- The Indian Rupee fell on Monday despite rising in the early part of the trading session as a sudden surge in demand for the dollar from importers put a cap on the gains in the currency.

- The currency rose earlier on the back of gains in the domestic market coupled with dollar selling in the morning session. But the trend in the Rupee remains intact and we expect it to appreciate in the near-term.

- The benchmark equity index gained more than one percent to its highest close in nearly a month on the back of optimism about the economy. Weakness in the dollar index also triggered gains in the Indian currency on Monday.