ICICI Direct's currency report on USDINR
Spot Currency
The rupee sustained sharp gains to end higher at 68.53 against the US$, rising for a sixth consecutive day. Weakness in the US$ along with a sharp rise in domestic equities is supporting the rupee • The dollar was mildly lower against major currencies ahead of US FOMC policy meeting. Market expectations are the Fed would continue to hold a dovish stance while any change from the same could result in sharp gains in the dollar. Investors await details on Brexit update as time is running out for the UK. The British Pound is expected to gyrate wildly as with only 10 days for the actual Brexit date the UK Parliament members continue to remain divided.
Benchmark yield
Sovereign treasury yields declined mildly to 7.32% as muted global yields and lower inflation kept yields in a range. Domestic retail inflation for February rose to 2.57%. Crude oil price strength could weigh on domestic debt • US treasury yields rose to 2.60% while worsening global growth expectations could cap rising yields. Incoming economic data remains important for further signals.
Currency futures on NSE
The dollar-rupee March contract on the NSE was at 68.63 in the previous session. March contract open interest declined 4.91% in the previous session • We expect the US$INR to meet supply pressure at higher levels. Utilise upsides in the pair to initiate short positions.
Intra-day strategy
| US$INR March futures contract (NSE) | View: Bearish on US$INR |
| Sell US$ in the range of 68.74 -68.80 | Market Lot: US$1000 |
| Target: 68.55 / 68.45 | Stop Loss: 68.93 |
| Support | Resistance |
| S1/ S2: 68.55 / 68.40 | R1/R2:68.75 /68.90 |
Read More First Published on Mar 19, 2019 11:05 am
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