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Asian Currencies Steady with Focus on Virus - HDFC Securities
* In line with other Asian peers, rupee weaken against US dollar amid risk off sentiment after spread of Coronavirus. However, the strong foreign fund inflows in domestic equity market restricted the losses. There were be good foreign fund inflows from ITI FPO and expected to get further flows from CPSE ETF at the end of month.
* Spot USDINR may peter out near the 71.40 Dec. 27 high, which is adjacent to the 50% bounce of the Jan. 2020 peak to valley decline.
* Indian sovereign bonds may extend Thursday’s gains after RBI doubled the limit for some overseas investments in local bonds that would allow longer-term investors certain exemptions. It raised the limit to Rs.1.5 trillion ($21 billion) for foreign investors that voluntarily commit to retaining a part of their investment in the country for at least three years.
* About Rs.543 billion has already been invested under the program since its introduction in March 2019, according to the RBI. Investment limit available for fresh allotment to be Rs.906.3 billion.
* Asian currencies were little changed in subdued trading amid Lunar New Year holidays in some of the region’s major markets including China. Concerns about the spread of the coronavirus continued to weigh on risk sentiment, keeping equities lower and boosting sovereign bonds.
* The yen outperformed Group-of-10 peers and climbed to the highest level in two weeks amid concern that the outbreak of a SARS-like virus could curb global growth.
USDINR January Futures :
* USDINR January Futures has a horizontal trend-line support around 70.80.
* It is trading below short and medium term moving averages.
* Momentum oscillators are heading northward indicating short covering bounce.
* The pair is having resistance at 71.65 and support at 70.80.
* Broadly, it has been consolidating in the range of 72.70 to 70.80.
USDINR JANUARY FUT. DAILY CHARTS
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