September 17, 2012 / 3:03 AM / in 5 years

MARKET EYE-USD/INR likely to fall below 54; reforms push

* USD/INR likely to fall below the psychological 54
level in opening trades after the federal government announced
major economic reforms late Friday. The pair last closed at
54.30/31.
* India opened up foreign direct investment in multi-brand
retail and aviation, as part of a package of measures aimed at
reviving growth and staving off a ratings downgrade.
 
* NDF markets indicate that the major support at 54.02-54.18
(38.2 percent of 48.60-54.32, 23.6 percent of 43.85-57.32 rally
and low of July) will be broken when local markets open.
* RBI to announce rate decision at 0530GMT. While economists
still expect the central bank to hold rates, there is a growing
hope that the RBI may reciprocate with a rate cut or change to a
more dovish tone.
* A rate cut will lead to more rally in the rupee via equity
gains.
 

 (subhadip.sircar@thomsonreuters.com/;
subhadip.sircar.thomsonreuters.com@reuters.net/;
krishnakumar.k@thomsonreuters.com)

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