IGI Logo

All Eyes will be on RBI Monetary Policy - HDFC Securities 

Rupee expected to open slightly higher following steady dollar index and rally in risk assets while surge in crude oil prices and US Treasuries may add pressure. The trend for rupee will be decided by the RBI Monetary policy decision which could be hint for unwinding of excess liquidity from the system as domestic economic conditions improving which increased pace of vaccination. At the same time, there is looming concerns for rising inflation following surge in imported commodities and food prices. The rise in bond yields, subdues credit offtake and ample liquidity in the banking system are the other aspects that the MPC may address in today’s bi-monthly monetary policy meeting.

Asian stocks look set to rise after Wall Street climbed on easing concerns about the U.S. debt ceiling and an energy crunch. Traders are awaiting key jobs data as well as the start of trading in China.

Spot USDINR on Thursday closed at 74.79 with loss of 20 paise or 0.26 after hitting psychological level of 75 on Wednesday. Near term profit booking could continue in the pair while medium term trend has turned bullish.

US rates came under significant pressure today, with the 10- and 30-year yields each rising by about five basis points to their highest levels since June at 1.58% and 2.13%, respectively,

U.S. Senate leaders reached a deal to vote on raising the U.S. debt ceiling until December 3, forestalling the threat of default. The agreement would lift the borrowing cap by $480 billion, and a vote could come later Thursday

Technical Observations

USDINR October futures about to give positive cross over of 20 days simple moving average to 50 days simple moving average.

Momentum oscillator, relative strength index of 14 days period exited from overbought zone indicating near term profit booking.

The pair has downward slopping trend line support around 74.70

Momentum indicator, Directional Movement Index remains bullish with +DI placed above –DI and ADX line heading higher

USDINR October futures likely to show profit booking and expected to touch level of 74.50 odd levels before heading higher while on near term resistance remains at 75.25.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.hdfcsec.com/article/disclaimer-1795

SEBI Registration number is INZ000171337

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer