ICICI Direct expects USDINR to find supports at lower levels. Utilise downsides in the pair to initiate long positions.
ICICI Direct's currency report on USDINR
The rupee pared its opening gains to end weaker at 71.02 as a surge in oil prices and weak CNY weighed. It is expected to open further lower today tracking an escalation in geopolitical risks as well as fragile US-China trade sentiment • The dollar index ended lower amid a cool-off in US yields as well as rise in US political woes. Speaker Pelosi allowing the opening of a formal enquiry on the US President has escalated US domestic political tidings running into an election year. The CNY is currently trading near 7.12 levels. Any further depreciation is likely to weigh on all EM currencies, including the rupee.
Domestic benchmark 10-year yields ended slightly higher at 6.78% as investors try to price in the government’s corporate tax rate cut pressure on fiscal deficit • US 10-year treasury yields ended lower at 1.65% amid US domestic political woes. Also, the US President’s China bashing at the UN has raised concerns over US-China trade talks.
Currency futures on NSE
The dollar-rupee September contract on the NSE was at 71.05 in the previous session. Open interest declined 15.99% in the previous session • We expect the US$INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions.
|US$INR September futures contract (NSE)||View: Bullish on US$INR|
|Buy US$ in the range of 70.98 -71.02||Market Lot: US$1000|
|Target: 71.25 / 71.35||Stop Loss: 70.|
|S1/ S2: 71.0 / 70.80||R1/R2:71.25 / 71.35|