ICICI Direct’s currency report on USDINR
US dollar fell 0.20% yesterday amid a rise in risk appetite in the global markets. Further, a statement by Fed officials played down the possibility of an imminent rate hike. However, sharp downside in dollar was cushioned on surge in US treasury yields. Rupee future maturing on October 27 appreciated by 0.61% in yesterday’s trading session on weakness in dollar and improved risk appetite in global markets. However, further gains were prevented on FII outflows and proliferated crude oil prices. The rupee is expected to appreciate on weakness in dollar and FII inflows. However, sharp gains may be prevented on a surge in crude oil prices and mixed Asian markets. Market sentiments are hurt on worries over elevated inflation and risk from China’s property sector. Additionally, investors bet that major central banks across the globe may need to start tapering stimulus to address stubbornly high inflation.
Euro appreciated by 0.18% yesterday mainly on the back of weakness in the dollar and rise in risk appetite in global markets. Further, improved economic data from the Euro Area supported the single currency. German PPI increased by 2.3% in September 2021 compared to 1.5% in the preceding month. However, sharp upside was capped as ECB chief economist Philip Lane pushed back against market pricing of rate hikes. Euro is expected to trade with a positive bias on weakness in the dollar. However, sharp upside may be capped on expectation of disappointing economic data from Euro Area, risk aversion in global markets and divergence in monetary policy. ECB is still committed to continue its loose monetary policy. EURINR (October) is expected to trade in a range of 87.00-87.60.
|USDINR September futures contract (NSE)|
|Sell USDINR in the range of 75.00-75.02|
|Target: 74.70||Stop Loss: 75.15|
|Support: 74.80/74.70||Resistance: 75.15/75.20|
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