Buy USDINR; target of 69.65 - 69.75: ICICI Direct

ICICI Direct's currency report on USDINR

Spot Currency

The rupee ended sharply lower at 69.34 vs. US$ as strength in the dollar and rising concerns on global growth weighed. Also, firm crude oil prices and caution ahead of RBI policy meeting will keep rupee appreciation in check • The dollar extended mild gains amid weakness in the Euro and uncertainty around Brexit. Many other DM central banks joining the dovish bandwagon is supporting the US$. The upcoming US March employment data as well as clarity on today’s meaningful vote on Brexit remain key events to be watched. US GDP growth slowed to 2.2% in fourth quarter.

Benchmark yield

Sovereign benchmark treasury yields declined to 7.32% yesterday. Domestic retail inflation for February rose to 2.57% while flows in the debt segment would keep yields contained. Gradually rising crude oil prices will remain in focus in the near term • US treasury yields rose to 2.39% while resurfacing of global growth concerns as well as Brexit stalemate remain key triggers. Europe and Japan 10-year debt yields have become negative in the last few sessions.

Currency futures on NSE

The dollar-rupee April contract on the NSE was at 69.55 in the previous session. April contract open interest rose 9.38 % in the previous session • We expect the US$INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions.

Intra-day strategy 

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