INR forecast: INR opens Flt at 73.41 as against yesterday’s closing of 73.46 and may trade the day between 73.10-73.60 under two way price action.
Yesterday INR closed to two weeks high at 73.46 on back of various positive factors like soft trade deficit; stability min crude; cool off in yields etc. Going ahead, possibility seems to be building that if INR breaks above 73.10 possibility of technical correction towards 71.50 may come in. At this point it cannot be clearly said, break of 73 will add momentum to this opinion. We still believe that as we had into election season, possibility of 75.50 is not ruled out.
Another imp event is possible resolution of ESSAR Steel as ArcelorMittal offers to clear loans of related parties could bring about USD 6 bn of inflows. This could also be one of the reason for recent gains in INR. Any news on this front could lead to sharp gains in INR.
Other news that is concerning the market is disappearance of Saudi journalist in Turkey last week. Jamal Kashoggi was a senior journalist and has gone missing after visiting the Saudi embassy in Turkey. While some of Turkish sources indicated possible involvement of Saudi Royal family, story continue to develop. Any sanction by US on Saudi, chances are less, could lead to spike in crude and be bad for INR.