Sell USDINR; target of 70.55 - 70.45: ICICI Direct

ICICI Direct's currency report on USDINR

Spot Currency

The rupee ended the session with sharp gains at 70.72 ending higher by almost 45 paise against the US$ as improved risk sentiment as well as expectation of positive flows in domestic markets supported the rupee. It is expected to open on a further higher note today tracking global cues • The dollar retraced from its crucial resistance levels near 97 as a rebound in Euro and GBP weighed. Traders would be tracking developments on the Brexit front as any positive news on the same would provide a further flip to risk assets.

Benchmark yield

Sovereign treasury was unchanged at 7.36% as muted global yields and lower inflation have kept yields in a range. Domestic retail inflation fell to 2.05% in January 2019, which could provide further space for RBI to cut rates • US treasury yields rose to 2.69% while worsening global growth expectations could cap sharply rising yields. Incoming economic data remains important for further signals.

Currency futures on NSE

The dollar-rupee February contract on the NSE was at 70.87 in the previous session. February contract open interest increased 0.58% 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.

Intra-day strategy 

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