Buy USDINR; target of 68.25 - 68.30: ICICI Direct

ICICI Direct's currency report on USDINR

Spot Currency   
The rupee ended the session with sharp losses of 0 . 58 % , testing lowest levels in almost four weeks . However it is expected to open on higher today, still seeing limited gains ahead of upcoming crucial Opec meeting • The US $ ended higher amidst risk concerns of aggravating trade friction between US and other countries . JPY gained on the back of safe haven currency demand while Euro and Pound declined sharply owing to US $ strength . Global equity markets slumped weighed by fears of full scale global trade wars.

Benchmark yield  
Sovereign bonds extended further gains amidst steady crude oil prices as well slide in global bond yields . Global trade wars could see yields declining as it could weigh on growth prospects • US 10 - year yields declined in yesterday session as investors chased safe haven assets including US treasury . Yields to remain volatile in backdrop of hawkish Fed while trade frictions could see flight to safety provided by sovereign bonds.

Currency futures on NSE
Near - month dollar - rupee June contract on the NSE was at 68. 40 in the previous session . June contract open interest increased 7 . 27 % in the previous day • We expect the US$INR to find supports at lower levels . Utilise downsides in the pair to initiate long positions. Intra-day strategy