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 68.50 - 68.70.
ICICI Direct's report on currency
Government bond bonds were little changed after a fresh supply of state government debt weighed on investor appetite • The benchmark 6.97% 2026 bond yield remained unchanged at 6.40% in previous day • Yield on the US 10-year yield rose to 2.38% from 2.36% on Tuesday.
The rupee pared gains after a strong opening as domestic factors continue to weigh on rupee. Outflow redemptions, rise in crude oil prices and news of lower expectation of GDP data is weighing on the rupee in the near term • The US dollar index rose against major currencies as US yields recovered amidst ranged consolidation. Major currency pairs continue to trade in range ahead of commencement of Donald Trump’s presidency.
US$/INR derivatives strategy
In the currency futures market, the most traded dollar-rupee January contract on the NSE ended at 68.32. The January contract open interest fell by 0.09% from the previous day • February contract open interest rose 1.20% from previous day • We expect the US$ 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 68.25-68.35||Market Lot: US$1000|
|Target: 68.50/ 68.70||Stop Loss: 68.15|
|S1/ S2: 68.30 / 68.10||R1/R2:68.50/68.70|
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