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 ended its winning streak with sharp losses of over 0.94% losing almost 67 paise vs. the US$. The highest jump in crude oil price since the Gulf War spooked currencies of most oil importing countries including the rupee. It is likely to open further lower today as crude oil prices remain firm in the backdrop of a strong US$ • The dollar index ended higher amid safe haven buying as well as caution ahead of Fed policy meet outcome. Euro has pared its gains from policy outcome as slowdown reality set in. The Dollar Index could rise further higher if the Fed turns out to be less dovish than expected. CNY is currently trading at 7.07 levels as investors await the progress of US-China trade talks.
Domestic benchmark 10-year yields ended higher at 6.72% on Monday. Yields are likely to remain firm in the backdrop of a recovery in US yields as well as a surge in oil prices • US treasury yields ended slightly lower at 1.85% as investors continue to reprice Fed’s dovish stance. Fed is likely to cut rates by 25 bps in its policy meet this week. The Fed’s assessment is likely to provide fresh direction to yields.
Currency futures on NSE
The dollar-rupee September contract on the NSE was at 71.69 in the previous session. Open interest increased 0.80% 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 September futures contract (NSE)||View: Bullish on US$INR|
|Buy US$ in the range of 71.83 -71.87||Market Lot: US$1000|
|Target: 72.15 / 72.25||Stop Loss: 71.67|
|S1/ S2: 71.75 / 71.60||R1/R2:72.10 / 72.25|
Coupon code: DIWALI. Offer valid till 10th November, 2019 .