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 fell sharply this week, as investors sold notes after the country’s rate - setting Monetary Policy Committee’s latest meeting suggested little chance of near - term rate cuts • The GoI benchmark 6.79 % 2027 bond yield rose to 6.76 % from 6.73% in the previous session • Yield on the US 10 - year yield rose to 2.36 % from 2.35 % in the previous session.Forex (US$/INR)
The rupee fell for a fourth straight week against the US$, as a string of solid US economic data and tax cut plans amid growing bets o n a third Federal Reserve rate increase this year boosted US$ prospects • The US$ fell mildly against major currencies a s sharply lower - than - expected September employment data weighed on rate hike sentiments. US September payrolls contracted by 33000 rolls against expectation of addition of 80000 rolls. However, wage growth was higher at 2.9% against expectation of 2.5%. Lower employment data along with a change in the Fed chair would keep the US$ in focus in the near term. The British pound continue d to slide as the UK Prime Minister is seen losing support amid Brexit negotiations.Strategy In the currency futures market, the near month dollar - rupee October contract on the NSE ended at 65.55. The October contract open interest increased 8.30 % from the previous day • November contract open interest increased 1.42 % 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 October futures contract (NSE)||View: Bearish on US$INR|
|Sell US$INR in the range of 65.60-65.70||Market Lot: US$1000|
|Target: 65.45 / 65.35||Stop Loss: 65.80|
|S1/ S2: 65.45 / 65.35||R1/R2:65.60 /65.80|