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 closed slightly higher v/s US$, although it pared most of its opening gains by the end of the session. It is likely to open slightly changed while losses in CNY and strength is US$ is likely to exert pressure on Rupee • The US dollar extended further gains with dollar index ending the session higher above 98.0 levels. Weakness in Euro and profit booking in JPY supported gains in dollar index. Chinese Yuan is currently trading at 7.03 levels. Depreciation in CNY is putting pressure on most of the EM currencies including Rupee. Development on US-China Trade front is likely to dictate moves in currencies in near term.
Sovereign bond yields rose to 6.63% as outflows from domestic markets and confusion over sovereign bond issue abroad is creating a hurdle for a further decline. Yields are likely to remain in a range in the near term • US 10-year yields fell 5-bps to end at 1.53%, testing almost threeyear lows. Sharper cool off in 10-year yields compared to near term treasuries is posing the risks of slowdown in US economy.
Currency futures on NSE
The dollar-rupee August contract on the NSE was at 71.40 in the previous session. Open interest increased 1.20% 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 August futures contract (NSE)||View: Bullish on US$INR|
|Buy US$ in the range of 71.25 -71.31||Market Lot: US$1000|
|Target: 71.55 / 71.65||Stop Loss: 71.12|
|S1/ S2: 71.25 / 71.10||R1/R2:71.55 / 71.70|