ICICI Direct expects USDINR to find supports at lower levels levels. Utilise downsides in the pair to initiate long positions.
ICICI Direct's currency report on USDINR
The rupee closed higher for third consecutive session appreciating by Nine paise v/s US$. Rupee has been on upswing since RBI policy decision, wherein it did not cut rates citing inflation threat, which has helped India maintain the real rate. Rupee is likely to open slightly changed today while we expect strength in oil prices and higher dollar could lead to some profit booking in Rupee • The US$ ended the session higher buoyed with the significantly higher US employment data. Non farm payrolls for November were at 266000 jobs against market expectation of 1800000 jobs. This week crucial ECB and Federal Reserve policy meeting are likely to provide fresh triggers. CNY is currently trading near 7.03 levels, any further appreciation is positive for EM currencies.
Domestic benchmark 10-year ROSE further higher in previous session. Also strength in US yields coupled with higher oil prices would further put pressure on domestic debt • US 10-year benchmark yields closed further higher at 1.84% supported by positive risk sentiment and strong US employment data. Investors would be tracking upcoming Fed policy outcome to take a gauge of Fed’s rate trajectory.
Currency futures on NSE
The dollar-rupee December contract on the NSE was at 71.37 in the previous session. Open interest increased 0.99% in the previous session • We expect the US$INR to find supports at lower levels levels. Utilise downsides in the pair to initiate long positions.
|US$INR December futures contract (NSE)||View: Bullish on US$INR|
|Buy US$ in the range of 71.29 -71.33||Market Lot: US$1000|
|Target: 71.55 / 71.65||Stop Loss: 71.14|
|S1/ S2: 71.30 / 71.15||R1/R2:71.50 / 71.65|