The dollar weakened against its major peers with euro among the outperformers. The yen climbed to the strongest level against the greenback since September. Treasuries dropped and equity-index futures for the S&P 500 and the Nasdaq 100 retreated. Japanese stocks fell at the open.
The sharp rebound in the Indian currency, from its record low of 87.93 per dollar in the middle of February, gives a window for companies to hedge their positions, even as the long-term outlook for the rupee remains weak, according to currency traders and treasury heads.
The recent unfilled weekly upside gap is likely to be a bullish breakaway gap, which is normally formed at the beginning of sharp up-trended moves. The next upside target to be watched for Nifty is around 24,550 and 24,850 in next two weeks. Immediate support is at 23,500.
To export, companies must be able to import machinery and other components and, right now, that is very difficult because of the bureaucracy involved in setting up businesses in India. So, this is an urgent requirement for India to address. If they ease the system, it will encourage global players like Apple to set up their own factories and manufacture in India.
