ICICI Direct expects USD to meet supply pressure at higher levels. Utilise the up side in the pair to go short on the USDINR.
ICICI Direct's currency report on USDINRDebt market
Government bonds were little changed as sentiment s turned bearish amid higher oil prices and lowered expectations on rate cut s in the near future • The GoI benchmark 7.17 % , 2028 bond yield rem ained unchanged 7.26 % in the previous session • Yield on the US 10 - year benchmark bond declined to 2.53 % from 2. 5 6 % in the previous session.Forex (US$/INR)
The rupee fell against the US$, as higher oil prices and overnight strength in the US$ weighed on emerging currencies including the rupee. However , with the announcement of FDI reforms , we expect the rupee to see some strength from current levels • The US$ declined against major currencies as strength in the Euro and JPY weighed on the US$. The dollar fell a long with US yields that continue to face hurdle near the 2.60 % zone. The euro gained post ECB minutes although 1.21 continues to be a crucial hurdle. A breach of this level could see the pair rising till 1.23 levels.Strategy In the currency futures market, the near month dollar - rupee January contract on the NSE was at 63.77. The January contract open interest declined 4.92 % from the previous day • February contract US$INR ended at 63.98. Open interest increased 2.97 % in the previous session • We expect the US$ to meet supply pressure at higher levels. Utilise the up side in the pair to go short on the US$INR.
|US$INR January futures contract (NSE)||View: Bearish on US$INR|
|Sell US$INR in the range of 63.75 - 63.81||Market Lot: US$1000|
|Target: 63.58 / 63.50||Stop Loss: 63.92|
|S1/ S2: 63.65 / 63.50||R1/R2:63.80 /63.90|