ICICI Direct expects USDINR to find supports at lower levels. Utilise downsides in the pair to initiate long positions.
ICICI Direct's currency report on USDINR
The rupee ended mildly higher tracking a smart recovery in domestic equities. However, it is expected to open at fresh record lows amid sharp selling in global equities • The US$ is weighed by a recovery in major currencies as well as a decline in US yields. The US President’s comments over the Fed rate hike trajectory led to a sharp decline in US yields. The JPY continues to gain owing to a hit to risk - on sentiment. US$ may see some further declines. However, EM currencies may fail to capitalise on dollar losses amid shaky sentiment.
Government bonds rose as the rupee saw some recovery while a decline in crude oil prices is also positive for domestic debt. Crude has reversed sharply from $ 85 / bl while a decline in US yields may further support domestic debt • US treasury yields further declined as US equities tumbled while the US President’s apparent displeasure at the Fed’s rate hiking spree also led investors to cover shorts in US debt.
Currency futures on NSE
The dollar - rupee October contract on the NSE was at 74. 38 in the previous session. October contract open interest declined 1.46 % in the previous session • We expect the US$INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions.
|US$INR October futures contract (NSE)||View: Bullish on US$INR|
|Buy US$ in the range of 74.44 -74.52||Market Lot: US$1000|
|Target: 74.75 / 74.80||Stop Loss: 74.32|
|S1/ S2: 74.50 / 74.30||R1/R2:74.80 /74.95|