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Published on 24/07/2020 2:23:14 PM | Source: Emkay Global Financial Services Ltd

This week USDINR spot traded in a very tight range of 74.50-75 By Rahul Gupta, Emkay Global

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Below is the Quote on Rupee by Mr. Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services:  

“This week USDINR spot traded in a very tight range of 74.50-75. The pair was unable to fall below 74.50 on likely RBI intervention and caution over US-China trade war. If the trade tiff escalates then fears of US ending the Phase-One deal will arise keeping USDINR afloat. But we don’t expect a sharp rally as traders are focusing on the coronavirus vaccine developments and are pretty convinced over getting additional stimulus packages. In spot 75 is acting as a psychological resistance, a consistent trading above that will lead to a rally towards 75.50. The USD/INR 1-month ATM Volatility has dropped to 5% from 5.67% as on Jul 14. The fall in ATM Volatility Term structure indicates that the market is not showing signs of stress. Also, USDINR PCR (Put/Call ratio) has fallen to 0.87% from 0.91% seen last week. Also, with 5 days left for the expiry, according to the Max Pain theory, the USD/INR July contract will expire in between 75-75.25. Thus, until significant cues, we expect USDINR will continue the sideways move within a broader range of 74.50-75.50. Only either side break will clarity over the trend.”

 

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