ICICI Direct expects USDINR to find support at lower levels. Utilise downsides in the pair to initiate long positions.
ICICI Direct's currency report on USDINR
The rupee depreciated by 10-paise vs. the US$, spooked by depreciation in the Chinese Yuan as well as domestic growth woes. It is likely to open slightly lower today and would remain under pressure owing to a rebound in oil price and a further weakening CNY • The US$ index ended mildly higher yesterday even as investors continue to gauge US-China on-again, off-again trade talks. Also, the US President, who is likely to sign a bill supporting Hong Kong protestors would further complicate US-China trade relations. CNY is currently trading at 7.04. Any further weakness in the same is likely to put pressure on EM currencies, including rupee.
Domestic benchmark 10-year yields ended unchanged at 6.46% in the previous session. Growing worries over domestic growth as well as hardening US yields could contain a sharp appreciation in domestic debt • US 10-year benchmark yields ended further lower at 1.74%. The US President’s fresh threat of higher tariffs on Chinese imports in case of a deal failure worsened risk sentiments.
Currency futures on NSE
The dollar-rupee November contract on the NSE was at 71.86 in the previous session. Open interest declined 1.84% in the previous session • We expect the US$INR to find support at lower levels. Utilise downsides in the pair to initiate long positions.
|US$INR November futures contract (NSE)||View: Bullish on US$INR|
|Buy US$ in the range of 71.78 -71.82||Market Lot: US$1000|
|Target: 72.05 / 72.15||Stop Loss: 71.63|
|S1/ S2: 71.75 / 71.55||R1/R2:72.0 / 72.15|