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 on a higher note, up by 12 paise vs. the US$ amid improving global risk sentiment. It is likely to open further stronger today due to mild weakness in US$ as well as steady Chinese Yuan • The US$ index is trading further lower against major currencies amidst improved risk sentiment. Although the Fed has signalled it may not cut interest rates soon, positive hints from Fed regarding strength in US economy and improving global risk scenarios boosted EM currencies. Likely snap elections in the UK could provide fresh triggers to the Brexit saga. The CNY has appreciated towards 7.03 levels vs. US$. Strength in the same would help EM currencies contain sharp losses.
Domestic benchmark 10-year yields ended unchanged at 6.45% in the previous session. Domestic GST collection for October were at | 95380 crore, down 5.29% on a YoY basis • The US 10-year benchmark further extended losses to close higher at 1.71% in the previous session. Risk sentiments improved supporting US equities while yields are most likely to remain in a range.
Currency futures on NSE
The dollar-rupee November contract on the NSE was at 70.99 in the previous session. Open interest increased 8.60% in the previous session • We expect the US$INR to meet supply pressure at higher levels. Utilise upsides in the pair to initiate short positions.
|US$INR November futures contract (NSE)||View: Bearish on US$INR|
|Sell US$ in the range of 70.83 -70.87||Market Lot: US$1000|
|Target: 70.55 / 70.45||Stop Loss: 71.03|
|S1/ S2: 70.70 / 70.50||R1/R2:70.85 / 71.05|