rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Optimism about rupee grows, Barclays cuts one month forecast to 59

Optimism about rupee grows, Barclays cuts one month forecast to 59

March 11, 2014 13:14 IST

RupeeAnalysts are growing increasingly bullish about the rupee in the near-term on the back of a sharply narrower current account deficit, easing inflation, and strong foreign investor inflows.

Barclays on Tuesday cut its one-month dollar/rupee (USD/INR) forecast to 59 from 61, with a stop loss at 62.50.

That would now place Barclays as the most optimistic among the 25 respondents to a Reuters poll which was released on Friday showing the median forecast at 62, wherein Barclays was still maintaining its forecast at 61.

Technically, USD/INR remains well below its 200-day moving average after first breaching that trend level on Thursday for the first time since May 2013, adding to the optimism on the rupee.

Expectations of a big victory for the BJP in the general elections to be completed by May have been widely cited as a reason for the rally, given market perceptions that the opposition party is more business friendly and reform minded.

However, Barclays warns the election outcome remains uncertain, and keeps its 3-, 6- and 12-month USD/INR forecasts unchanged at 61.0.

Image: Barclays on Tuesday cut its one-month dollar/rupee (USD/INR) forecast to 59 from 61, with a stop loss at 62.50; Photograph: Reuters

Source:
© Copyright 2014 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.