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 by two-paise yesterday supported by an appreciating Chinese Yuan and positive inflows in the last few sessions. However, it is likely to open sharply lower today amid strength in US$ and rising concerns over domestic fiscal slippage • The US$ index recouped 98.0 levels to end higher against major currencies. Strength in US equities coupled with rising yields is positive for US$. Chinese Yuan has appreciated towards 6.97 levels yesterday amid news that the US and China may work towards reducing tariffs on a proportionate basis. This is mildly positive for EM currencies, including rupee.
Domestic benchmark 10-year yields ended higher at 6.52% in the previous session. Domestic GST collections for October were at Rs 95380 crore, down 5.29% on a YoY basis • The US 10-year benchmark yields extended further gains to close at 1.86% in the previous session. Risk sentiments improved supported by overall strength in US equities while a sharper rally in yields could be a signal that the US economy is relatively preforming well.
Currency futures on NSE
The dollar-rupee November contract on the NSE was at 71.04 in the previous session. Open interest increased 7.67% in the previous session • We expect the US$INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions.
|US$INR November futures contract (NSE)||View: Bullish on US$INR|
|Buy US$ in the range of 71.28 -71.32||Market Lot: US$1000|
|Target: 71.55 / 71.65||Stop Loss: 71.12|
|S1/ S2: 71.35 / 71.15||R1/R2:71.50 / 71.65|