ICICI Direct expects US$ to meet supply pressure at higher levels. Utilise the up side in the pair to go short on the US$INR.
ICICI Direct's currency report on USDINRDebt market
Government bonds fell for a second day as investors sold notes after a surge in crude oil prices triggered fears the inflation rate is likely to stay above the central bank’s target • The GoI benchmark 6. 79 % 2027 bond yield rose to 7. 3 9 % from 7. 34 % in the previous session • Yield on the US 10 - year benchmark bond rose to 2.4 6 % from 2.41% in the previous session.Forex (US$/INR)
The rupee rose for a fourth straight session as gains due to US$ weakness outweighed losses triggered by oil - related outflow concerns • The US$ fell below 92 - level as weakness against major as well as emerging currencies are weighing on the US$. Reversal in reflation trade in 2017, coupled with an initial setback to US President’s reforms agenda led to profit booking. The Euro continue d its unabated rise against the US$ as well as JPY as relative higher growth and QE pullback expectations is supporting common currency.Strategy In the currency futures market, the near month dollar - rupee January contract on the NSE was at 63.67 . The January contract open interest increased 9.88 % from the previous day • February contract US$INR ended at 63.87. Open interest increased 9.60 % in the previous session • We expect the US$ 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 63.72 - 63.78||Market Lot: US$1000|
|Target: 63.60 / 63.50||Stop Loss: 63.91|
|S1/ S2: 63.60 / 63.40||R1/R2:63.75 /63.95|