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Published on 7/08/2020 9:25:02 AM | Source: HDFC Securities Ltd

Dollar down with stimulus bill in focus - HDFC Securities 

Posted in Currency Report| #HDFC Securities #Currency Tips

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Dollar down with stimulus bill in focus -  HDFC Securities 

* The rupee erased all gains against the US dollar Tuesday as major state-owned banks bought the greenback and some recovery in broad dollar index. There might be dollar purchases on behalf of the Reserve Bank of India.

* Rupee remained stable after RBI policy decision and did not witnessed any volatility as MPC kept the status quo with unchanged in interest rate. The comment on inflation and no change in interest rate pushed bond yield higher as market was divided on rate cut.

* The dollar fell, along with Treasuries yields, as investors weighed the uncertainty of whether American lawmakers would pass a coronavirus relief package. U.S. House Speaker Nancy Pelosi said negotiations on a new virus relief package are making progress, but the two sides remain at an impasse on major issues with their self-imposed Friday deadline for a deal looming.

* Trump says he expects to sign orders on Friday or Saturday extending enhanced unemployment benefits and imposing a payroll tax holiday

* Asian stocks looked set for a mixed open today as investors weighed hopes for an agreement on a stimulus package from Washington against continued U.S.-China tensions.

* Applications for U.S. unemployment benefits unexpectedly fell last week to the lowest since March, offering a ray of hope for the economy.

Technical Observations:

USDINR August Futures managed to closed above 8 DEMA.

* The pair is having recent bottom and Doji candlestick pattern low as support at 74.55 and resistance around 75.60.

* Momentum Oscillator, RSI of 14 days period heading consolidating around center line with divergence suggesting bounce in coming days.

* Near term trend remains sideways to range bound with broad range of 75.50 to 74.50.

* USDINR August futures expected to start flat and trade in the range of 75.40 to 75

USDINR August Futures Daily Chart

 

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