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 with decent gains in the previous session, appreciating by 24-paise vs. the US$ on the back of record highs in domestic equities. Also, domestic markets have witnessed flows of almost $2.2 billion in November, which is positive for the rupee. It is likely to open with further gains today amid some gains in CNY • The US$ index closed with mild losses in the previous session while overall remaining in a range. Investors are keenly following any details on US-China trade deal. Any initial trade deal is likely to improve sentiments towards EM currencies. Appreciation in the CNY is likely to EM currencies, including rupee.
Domestic benchmark 10-year yields ended a bit higher at 6.48% in the previous session. Growing worries over domestic growth as well as hardening US yields could contain a sharp appreciation in domestic debt • US 10-year benchmark yields ended slightly lower at 1.74%. Investors are likely to track the upcoming US November employment data as well as direction of US-China trade talks.
Currency futures on NSE
The dollar-rupee December contract on the NSE was at 71.71 in the previous session. Open interest increased 35.23% 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 71.72 -71.76||Market Lot: US$1000|
|Target: 71.55 / 71.45||Stop Loss: 71.92|
|S1/ S2: 71.60 / 71.45||R1/R2:71.80 / 72.00|