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 extended mild gains on Monday registering fourth session of consecutive gains. However Implied opening from forwards suggest it is likely to open weak today tracking gains in US$ as well as steep rise in US yields • The dollar index closed mildly higher in yesterday session even as US president has fired his National security advisor (NSA) Bolton. Investors are gearing up ahead of crucial ECB policy meeting tomorrow. Chinese Yuan has seen some cool off in last few sessions and is currently trading at 7.11. EM currencies are likely to remain on edge ahead of crucial ECB and Fed policy meetings this month.
Domestic benchmark 10-year yields fell on Monday to 6.58%, while overall they remain in a range. Expectation of a rate cut in backdrop of some recovery in US yields are keeping domestic yields in range • US treasury yields jumped sharply to 1.73% as investors remain on sidelines ahead of ECB policy meeting. Also fresh Government and corporate offerings increased the concerns over supply and weighed on bond prices.
Currency futures on NSE
The dollar-rupee September contract on the NSE was at 71.84 in the previous session. Open interest declined 3.49% 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 71.88 -71.92||Market Lot: US$1000|
|Target: 72.15 / 72.25||Stop Loss: 71.72|
|S1/ S2: 71.95 / 71.80||R1/R2:72.20 / 72.30|