REVIEW : The trade session in last week was quite choppy, as rupee lost initially against the dollar on account of loosing equity markets and strengthening of dollar index.
However, it recoiled from the six-week low on account of anticipated central bank intervention, to prevent higher currency fluctuations.
The market fell on the view that global risk aversion may have been imbibed too fast after the European Central Bank move to protect the fall in euro-zone economies.
Foreign capital flows in and out of the stock market are main drivers of the rupee's fortunes. The foreigners have bought US $6.2 billion worth of shares so far in the year 2010, adding to record inflows of US $17.5 billion in 2009.
OUTLOOK : Asia's third-largest economy is targeting close to 15% export growth this year, but the trade official warned that it might face some uncertainty in the FY2010-11, because of the debt crisis unfolding in Europe, a key export junction for India.
The Finance Minister, Pranab Mukherjee, believes India's economic growth would surpass the IMF's projections in 2010 and 2011. In its latest World Economic Outlook, the IMF had projected India's growth at 8.8% in 2010 and 8.4% in 2011.
Week ahead, Rupee is expecting sideways trend against the dollar as the financial markets are very vulnerable to news from the Euro-zone and thus move accordingly.
Rise in dollar index above 85 levels and continuing uptrend is pressurizing rupee to wade low despite supportive inherent fundamentals. Technically speaking, we expect Indian rupee to trade in the range of 45.7300-44.750 levels. Either side breakout would confirm the trend.
