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 closed higher by almost 15 paise yesterday amid news that US-China talks have been progressing well and could move towards the first phase of deal. It is likely to open slightly higher today while investors would be awaiting the outcome of RBI’s policy announcement • The US$ ended the session with further losses as risk sentiment improved amid positive news on the US-China trade talks front. CNY appreciated sharply post the news thereby supporting most of the EM currencies, including the rupee. Investors would be looking ahead at the US November payrolls data on Friday for further cues on dollar.
Domestic benchmark 10-year yields ended unchanged at 6.47% in the previous session. Growing worries over domestic growth and weakness in the rupee could cap a sharp appreciation in domestic debt • US 10-year benchmark yields closed higher at 1.77% buoyed by positive risk sentiment. Investors are likely to track the upcoming US November employment data while awaiting clarity on trade deal progress.
Currency futures on NSE
The dollar-rupee December contract on the NSE was at 71.67 in the previous session. Open interest increased 8.63% 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 71.73 -71.77||Market Lot: US$1000|
|Target: 71.50 / 71.40||Stop Loss: 71.93|
|S1/ S2: 71.60 / 71.40||R1/R2:71.80 / 72.00|