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 USDINR
Government bon ds fell, as investors deferred purchases ahead of the key September inflation data. CPI growth fell to 3.28% against market expectation at 3.53%, which could support bonds as well as the rupee • The GoI benchmark 6.79 % 2027 bond yield rose to 6.75% from 6. 74 % in the previous session • Yield on the US 10 - y ear yield declined to 2.3 2 % from 2. 3 5 % in the previous session.Forex (US$/INR)
The rupee rose to its highest in over a week against the US$, helped by equity - related inflows and tracking the US currency’s overnight slide after the Federal Reserve’s September meeting minutes reflected policymakers’ concerns over weak inflation • The US$ extended losses against major currencies ahead of crucial inflation data post the mixed September employment data. Mixed signals from Fed officials on December interest rate has also weighed on US$. Pound jumped sharply from day’s lows near 1.314 as Brexit and politics continue to dominate landscape ahead of BoE policy meeting.Strategy
In the currency futures market, the near month dollar - rupee October contract on the NSE ended at 65.20. The October contract open interest declined 1 5.49 % from the previous day • November contract open interest increased 1 3.23 % in the previous session • We expect the US$ to meet supply pressure at higher levels. Utilise up side in the pair to go short on he US$INR.
|US$INR October futures contract (NSE)||View: Bearish on US$INR|
|Sell US$INR in the range of 65.10-65.20||Market Lot: US$1000|
|Target: 64.90 / 64.85||Stop Loss: 65.30|
|S1/ S2: 65.08 / 64.88||R1/R2:65.15 /65.25|
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