Published on 9/12/2019 12:29:27 PM | Source: ICICI Direct

Daily Currency Outlook Of 09 December 2019 - ICICI Direct

Posted in Currency Report| #Currency Tips #ICICI Direct

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* The rupee closed higher for third consecutive session appreciating by Nine paise v/s US$. Rupee has been on upswing since RBI policy decision, wherein it did not cut rates citing inflation threat, which has helped India maintain the real rate. Rupee is likely to open slightly changed today while we expect strength in oil prices and higher dollar could lead to some profit booking in Rupee

* The US$ ended the session higher buoyed with the significantly higher US employment data. Non farm payrolls for November were at 266000 jobs against market expectation of 1800000 jobs. This week crucial ECB and Federal Reserve policy meeting are likely to provide fresh triggers. CNY is currently trading near 7.03 levels, any further appreciation is positive for EM currencies

* Equity benchmarks snapped two weeks rally as Nifty lost 1.1% over the week to settle at 11922.

* Broader market relatively underperformed as Nifty midcap and small cap lost 3% and 2.2%, respectively

* Domestic benchmark 10-year ROSE further higher in previous session. Also strength in US yields coupled with higher oil prices would further put pressure on domestic debt

* US 10-year benchmark yields closed further higher at 1.84% supported by positive risk sentiment and strong US employment data. Investors would be tracking upcoming Fed policy outcome to take a gauge of Fed’s rate trajectory

* Gold witnessed profit booking due to dollar strength and positive risk sentiment. It is anchored to development over US-China trade talks as well as global growth worries

* Brent oil closed up over 1.58% as Opec+ members have decided to deepen the current supply cuts from 1.2 mbpd to 1.7 mbpd from January 1,2020. This is likely to provide the support to oil prices

* Foreign institutional investors (FII) were net buyers to the tune of Rs 394 crore on December 5, 2019

* FIIs have been net buyers of more than Rs 315 crore in December 2019

* The dollar-rupee December contract on the NSE was at 71.37 in the previous session. Open interest increased 0.99% in the previous session

* We expect the US$INR to find supports at lower levels levels. Utilise downsides in the pair to initiate long positions


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