Buy USDINR; target of 65.60 - 65.68: ICICI Direct

ICICI Direct's currency report on USDINR

Spot Currency

The rupee posted its first monthly decline in five - months against the US$ , tracking a corresponding rise in the dollar index amid bets of a faster pace of rate increases from the US Federal Reserve • The US $ extended gains against major currencies except JPY as the Fed chair’s hawkish rhetoric continue to weigh on risk - on sentiment . Dollar index is near five - week high as 90. 70 levels. JPY rose against US$ as capital flows in Japan continued to help yen sustain gains. British Pound skidded against US$ as well as Euro as tensions of hard Brexit surfaced following exit draft prepared by European Commission.

Benchmark yield

Sovereign bonds fell for a seventh consecutive month in February, as fiscal deficit and inflationary woes triggered fears of rate hikes going ahead, while global markets turned volatile • US 10 - year yields declined but could remain at elevated level amid recent hawkish rhetoric from Fed chair’s first congressional testimony.

Currency futures on NSE
The near month dollar - rupee March contract on the NSE was at 65.32. The March contract open interest increased 17.58 % from the previous day • We expect the US$INR to find supports at lower levels. Utilise down sides in the pair to initiate long positions.

Intra-day strategy

US$INR March futures contract (NSE)	View: Bullish on US$INR
Buy US$INR in the range of 65.30 - 65.36	Market Lot: US$1000
Target: 65.60 / 65.68	Stop Loss: 65.18
Support	Resistance
S 1/ S 2: 65.40 / 65.30	R 1/R 2:65.65 /65.75

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