ICICI Direct's report on currencyDebt market
Government bonds fell for a second day, as a sustained rise in core inflation raised doubts over the next rate cut by the central bank’s monetary policy committee • The benchmark 6.97% 2026 bond yield rose to 6.88% from 6.83% in the previous day • Yield on the US 10-year rose to 2. 47% from 2.44% in the previous day on hawkish fed comments Forex (US$/INR)
The rupee rose for the first time in three sessions against the dollar, in line with most Asian currencies, amid caution ahead of Federal Reserve chief’s congressional testimony that weighed on the US dollar during the Asian session • The US$ continued its gaining momentum against major currencies as the US Fed chair said every meeting would be a live meeting in her congressional testimony. She raised concerns on raising rates too slow, which market participants anticipated as a hawkish tone. Today’s US CPI data would provide further cues on the rate hike trajectory US$/INR derivatives strategy
In the currency futures market, the most traded dollar-rupee February contract on the NSE ended at 67.00. The February contract open interest fell 2.49% from the previous day • March contract open interest rose 4.74% from previous day • We expect the US dollar to find supports at lower levels. Utilise downsides in the dollar to go long on the US$INR pair.
|US$INR February futures contract (NSE)||View: Bullish on US$INR|
|Buy US$INR in the range of 66.90-67.00||Market Lot: US$1000|
|Target: 67.35 / 67.55||Stop Loss: 66.80|
|S1/ S2: 67.05 / 66.85||R1/R2:67.35 /67.55|
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