Expecting the Re to remain within 46.80-47.10: Religare Commodities

Somnath Dey, AVP & In Charge Metal, Energy & Currency, Religare Commodities

Let’s start with Indian rupee because thought it has been on the choppy side but it has held below 47, around 46.70 at this point in time. What kind of a range are you working with for the next week?


Somnath Dey: We have seen a lot of upmove for the last 2-3 weeks but from the next week, we are not expecting a larger volatility in the market. We expect the INR to remain within the range of around 46.80 to around 47.10 but yes, we are not expecting very high jump in the market but we are not expecting the market to come down either, so 46.50 will always remain a support at least in the next week.


Sure but what side are you tilt into? Do you think rupee would see 46 first or are you also in the camp that also feel that 48 to 49 are the kind of levels that could be coming in rupee in coming one month?


Somnath Dey: What we feel is that the market should see somewhere around 46.50 before it goes beyond 47 and settles because lately the exporters have been very happy getting larger amount of INR with respect to dollar but yes, the lot of redemptions and a lot of liquidations are going to come and we think there can be a very good profit booking at may be till next Friday. Expectations will remain on a little choppy market next week somewhere between 46.50 to around 46.80.


Sure but how would you want to trade the Euro and the dollar because we have seen a bit of choppiness return into that as well? US dollar of course is trading around 15-month highs even at this point in time. How would you look at those ranges?


Somnath Dey: Euro, we do not feel that the zone is still out of any financial crisis. We feel that news are not going to be very good next week also. There are a lot of banks in Eurozone who are yet to declare their losses. With this, we will remain on the selling side.

Euro will be selling somewhere at 56.80 and expectation to trade somewhere between 56 and to 56.80 level but yes because Euro has been very volatile lately, any upmove above 57.20, you should maintain a very strict stop loss because Euro can get volatile somewhere between next Thursday to Friday.


Sure. Finally on dollar index, do you feel that it has much more gains coming in from here expecting that you could see good numbers coming in from the US payroll’s data. Do you think there is a much headway from there?

Somnath Dey: Of course dollar what we feel that can gain a lot. Our expectation is that dollar can go up to 88 not by next week, may be in next 2-3 weeks but yes, we are looking forward to a very high dollar strengthening. This comes with backing up of fundamentals, which like a lot of reserves of lot of Middle East countries can be converted from Euro to dollar, can be swapped from Euro to dollar and we can expect some of the gold reserves liquidation just to gain dollar because Euro at this point of time remains a little unsafe currency to hold as a reserve.A