ICICI Direct expects USDINR to meet supply pressure at higher levels. Utilise upsides in the pair to initiate short positions.
ICICI Direct's currency report on USDINR
The rupee ended almost unchanged in the previous session amid speculation that the central bank may have intervened to arrest further appreciation. However, it is likely to open sharply higher today, amid favourable statement from the US President regarding the US-China phase one trade deal as well as emerging signs that the Conservative Party may win a clear majority in UK elections • The US$ index although ended higher yesterday. It is trading sharply lower due to the relief rally seen across currencies. GBP is currently trading higher by almost over 2% while Euro is also trading higher. A sharp appreciation in CNY, which is currently trading at 6.98 levels is positive for most EM currencies, including the rupee.
Domestic benchmark 10-year yields ended higher at 6.78% in the previous session. They have come under pressure owing to concerns over a likely shortfall in government revenue risking the slippage of fiscal deficit targets • The US 10-year benchmark ended higher at 1.89% in the previous session. Yields were boosted amid positive risk sentiment due to the US President’s indication of likeliness of Phase one of the trade deal with China.
Currency futures on NSE
The dollar-rupee December contract on the NSE was at 70.92 in the previous session. Open interest increased 23.80% in the previous session • We expect the US$INR to meet supply pressure at higher levels. Utilise upsides in the pair to initiate short positions.
|US$INR December futures contract (NSE)||View: Bearish on US$INR|
|Sell US$ in the range of 70.73 -70.77||Market Lot: US$1000|
|Target: 70.50 / 70.40||Stop Loss: 70.93|
|S1/ S2: 70.60 / 70.40||R1/R2:70.75 / 70.95|