ICICI Direct expects USDINR to meet supply pressure at higher levels. Utilise the upsides in the pair to initiate short positions.
ICICI Direct's currency report on USDINR
The rupee ended sharply lower at 69.67, depreciating by 31 paisa vs. the US$. Surge in oil prices as well as strength in the dollar overnight spooked the rupee. Going ahead, RBI’s monetary policy meeting assumes significance as higher oil prices reduce possibility of rate cut • US$ witnessed mild profit booking yesterday as the Euro managed to sustain gains. Higher US retail sales supported the dollar in the last few sessions. However, US April employment data will be in focus in the backdrop of a slowdown in wage growth in the last employment report.
Sovereign benchmark treasury yields jumped to 7.48% on Monday. Strong oil prices as well as outflows seen in domestic markets in April are weighing on domestic debt • US treasury yields recovered 3 bps to end at 2.59%. Yields remain in a range awaiting further economic data. Higher retail sales could keep sharp declines in check ahead of May monetary policy meeting as well as April employment data.
Currency futures on NSE
The dollar-rupee April contract on the NSE was at 69.71 in the previous session. April contract open interest increased 7.23% in the previous session • We expect the US$INR to meet supply pressure at higher levels. Utilise the upsides in the pair to initiate short positions.
|US$INR April futures contract (NSE)||View: Bearish on US$INR|
|Sell US$ in the range of 69.77-69.83||Market Lot: US$1000|
|Target: 69.55 / 69.45||Stop Loss: 69.98|
|S1/ S2: 69.60 / 69.45||R1/R2:69.75 /69.90|
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