Buy USDINR; target of 71.70 - 71.80: ICICI Direct

ICICI Direct's currency report on USDINR

Spot Currency

The rupee depreciated by 4 paise to end at a fresh three-week low of 71.35 against the US dollar on December 27, continuing its losing streak for a sixth day in a row amid a steady rise in crude oil prices • The dollar was on the defensive on Monday in light year-end trade after suffering a setback the previous session, as hopes of a US-China trade deal lifted investors’ risk appetite, sapping safe-haven demand for the greenback.

Benchmark yield

Yields on the government’s 10-year treasury bill fell 1.15% and closed at 6.51 vs. 6.58 • The recent uptick in the US treasury yields could be attributed to the positive signals concerning the US-China phase-one trade deal.

Currency futures on NSE

The dollar-rupee January contract on the NSE was at 71.60 in the previous session. Open interest rose 22.8% in the previous session • We expect the US$INR to find support at lower levels. Utilise upsides in the pair to initiate long positions.

Intra-day strategy