The recent weakness in capital flows amidst souring of sentiments towards emerging markets is a source of weakness for the currency". Moreover, some deterioration in both the current and capital account in 2017 is also likely, the note said."While in the near-term, US weak Dollar policy can create some downside pressure on dollar/rupee, we believe that fundamental pressure on dollar/rupee remains on upside and we see dollar/rupee heading towards China Gas Safety Device Pressure Gauge Factory level of 72-73," Edelweiss Securities said in a research note.The report noted that rupee will not be able to escape global USD rally and receding Dollar liquidity..It further said that "strong surge in capital inflows post-Modi election euphoria was a key reason for the outperformance in rupee.However, the relative appreciation of the rupee is taking a toll through weak exports with Indias underperformance in global exports.95 against the US dollar.The Indian rupee has been one of the best performing emerging market currency in the last few years resulting in significant outperformance of around 15 per cent against emerging market basket and about 12 per cent in REER terms in the last three years."With half of the term of PM Modi over, investors would be bracing for a risk of gradual move towards populism, especially on the wake of demonetisation and state elections," the report said."This was on the back of fortuitous circumstances of decline in commodity prices resulting in lower imports and healthy capital inflows post Modi victory amidst benign global liquidity," the report said.The fundamental pressure on dollar/rupee is on upside and the pair is heading towards a level of 72-73 by December-end this year, says an Edelweiss Securities report."While we remain optimistic on Indias growth story and macro fundamentals; we believe that rupee over-valuation, rising commodity prices and growing protectionism amidst weakness in exports is likely to put pressure on rupee," the report said. The rupee is currently hovering at 66.According to the Edelweiss Forex rates annual currency outlook 2017, the outperformance of the rupee is unlikely to continue and US weak dollar policy can create some downside pressure on USD/INR in the near term