ICICI Direct expects USD to find supports at lower levels. Utilise downsides in the dollar to go long on the USDINR. Buy January Futures with a target of 68.40 - 68.60.
ICICI Direct's report on currency
Government bonds rose, as investors stepped up purchases on hopes retail inflation may fall further in December • The benchmark 6.97% 2026 bond yield fell to 6.37% from 6.39% the previous day • Yield on the US 10-year yield fell to 2.36% from 2.37% as traders were disappointed by President-elect Dona ld Trump’s speech in the absence of mention of his trade and economic stimulus policies.
The rupee rose against the dollar, tracking gains in most currencies as the US$ weakened after US President-elect Donald Trump’s speech did not reveal much about his future trade and fiscal policies • The US dollar index fell against major currencies with US$JPY seeing a sharp fall as traders preferred to book profit in Trump’s win wagers. However, most traders still remain bullish and await the President’s inaugural speech for cues on the US$.
US$/INR derivatives strategy
In the currency futures market, the most traded dollar-rupee January contract on the NSE ended at 68.21. The January contract open interest fell by 4.09% from the previous day • February contract open interest rose 3.43% from previous day • We expect the US$ to find supports at lower levels. Utilise downsides in the dollar to go long on the US$INR pair.
|US$INR January futures contract (NSE)||View: Bullish on US$INR|
|Buy US$INR in the range of 68.10-68.20||Market Lot: US$1000|
|Target: 68.40/ 68.60||Stop Loss: 68.00|
|S1/ S2: 68.10 / 67.90||R1/R2:68.50/68.70|
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