ICICI Direct expects US dollar to find supports at lower levels. Utilise downsides in the pair to go long on the US$INR.
ICICI Direct's currency report on USDINRDebt market
Government bonds ended higher for the first time in four sessions, as a decline in US treasury yields due to the Fed’s gradual rate hike stance aided by debt buying • The benchmark 6.97% 2026 bond yield was unchanged at 6.89% on the previous day • Yield on US 10-year further fell to 2. 42% from 2.46% in the previous dayForex (US$/INR)
The rupee rose for a second day against the dollar, a sixth day of gain in seven sessions, as foreign banks and exporters continue to sell amid weakness in the US$. However, sharp gains in the rupee could be halted if domestic equities see profit booking • The US dollar fell sharply against major currencies as US equities see highest profit booking since US presidential election results. The pound Sterling saw huge gains due to US$ weakness and UK Prime Minister’s decision to trigger Article 50 by March end. We expect US$ to remain under pressure as rate hike sentiment is already priced inUS$/INR derivatives strategyIn the currency futures market, the most traded dollar-rupee March contract on the NSE ended at 65.31. The March contract open interest rose 3.98% from the previous day • April contract open interest rose 17.52% from the previous day • We expect the US dollar to find supports at lower levels. Utilise downsides in the pair to go long on the US$INR pair.
|US$INR March futures contract (NSE)||View: Bullish on US$INR|
|Buy US$INR in the range of 65.25 - 65.35||Market Lot: US$1000|
|Target: 65.60 / 65.70||Stop Loss: 65.15|
|S1/ S2: 65.40 / 65.30||R1/R2:65.70 /65.80|
Coupon code: DIWALI. Offer valid till 10th November, 2019 .