ICICI Direct expects USD to meet supply pressure at higher levels. Utilise up side in the pair to go short on the USDINR.
ICICI Direct's currency report on USDINRDebt market
Government bonds fell for a third straight session, with the benchmark yield spiking to its highest in 14 months, as market participants cut positions after inflation accelerated to a seven - month high in October • The GoI benchmark 6.79 % 2027 bond yield rose to 7.05 % from 6.97 % in the previous session • Yield on the US 10 - year benchmark bond declined to 2.37 % from 2.41 % in the previous session.Forex (US$/INR)
The rupee swung between gains and losses before ending unchanged against the US$ , as fears of foreign fund outlflows were offset by weak US$ against major currencies • The US$ posted losses against major currencies as the Euro and JPY rose sharply even as rate hike setiment remain weak. The Euro rallied posting gains of over 1% leading to losses of almost 0.70% in the dollar index. On the other hand, emerging currencies are weighed by rising crude oil prices coupled with firm commodity prices, which is raising concerns over higher inflation prospects.
In the currency futures market, the near month dollar - rupee November contract on the NSE ended at 65.55. The November contract open interest increased 7.77 % from the previous day • December contract open interest rose 5.98 % in the previous session • We expect the US$ to meet supply pressure at higher levels. Utilise up side in the pair to go short on the US$INR.
|US$INR November futures contract (NSE)||View: Bearish on US$INR|
|Sell US$INR in the range of 65.50 - 65.60||Market Lot: US$1000|
|Target: 65.30 / 65.20||Stop Loss: 65.70|
|S 1/ S 2: 65.40 / 65.25||R 1/R 2:65.55 /65.65|
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