ICICI Direct expects USD to meet supply pressure at higher levels . Utilise up side in the pair to go short on the USDINR.
ICICI Direct's currency report on USDINRDebt market
Government bonds plunged for a second day, with the benchmark note settling at another record low, amid concerns that the central bank’s open market operations to sell sovereign securities will continue to add to supply • The GoI benchmark 6.79 % 2027 bond yield rose to 6.97 % from 6.96 % in the previous session • Yield on the US 10 - year benchmark bond yield rose to 2.41 % from 2.40 % in the previous session.Forex (US$/INR)
The rupee fell to a more - than - one - month low against US$, tracking lower equities amid mild strength in US$. Rising concerns over fiscal slippages over higher crude oil prices and GST hi ccups is also weighing on rupee • The US$ posted mild gains against major currencies due to decent gains against GBP and JPY offsetting losses against Euro. FX pairs remain in a range in absence of any major data while geo political event s continue to rule. Investors await cues on US tax reform as well as December monetary policy meeting as Fed is widely expected to raise interest rates by 25 bps.Strategy In the currency futures market, the near month dollar - rupee November contract on the NSE ended at 65.56. The November contract open interest declined 1.18 % from the previous day • December contract open interest rose 13.76 % in the previous session • We expect the US$ to meet supply pressure at higher levels . Utilise up side in the pair to go short on the US$INR.
|US$INR November futures contract (NSE)||View: Bearish on US$INR|
|Sell US$INR in the range of 65.42 - 65.48||Market Lot: US$1000|
|Target: 65.15 / 65.10||Stop Loss: 65.60|
|S1/ S2: 65.30 / 65.15||R1/R2:65.40 /65.50|