ICICI Direct's currency report on USDINR
US dollar index tumbled to its two weeks low amid a sharp jump in US weekly jobless claims numbers. Jobless claims hit a 19-month high last week and knocked treasury yields lower. Two year treasury yields fell to 4.5%. Also, anticipation of the Fed pausing its rate hike path in next week’s FOMC meeting weighed on the dollar • The rupee maturing on June 27 depreciated by 0.03% on Thursday after the RBI left rates unchanged for a second time in a row • The rupee is likely to gain amid weakness in the dollar. Data from US showed the labour market was slowing, bolstering expectations that US Fed may pause rate hikes in its meeting next week. As per CME FedWatch toll, the market is pricing a 75% chance of Fed hitting the pause button in upcoming meeting. US$INR is expected to face a hurdle near 82.70 and move back towards 82.30. Only a close below 82.30 would weaken the pair towards 82.10.
Intra-day strategy
| US$INR June futures contract (NSE) | |
| Sell USDINR in the range of 82.60-82.62 | |
| Target:82.35 | Stop Loss: 82.75 |
| Support: 82.30/82.20 | 82.75/82.90 |
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