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Dollar dips on lackluster economic data -HDFC Securities 

Rupee could start the day on positive note amid overnight weakness in dollar index after upbeat US economic data. Asian stocks look set for a steady open after large U.S. technology shares climbed in a defensive tilt to the Wall Street rally. On Wednesday, rupee pared losses followed by four days of gains on back of bargain buying and profit booking at domestic equity market. However, overall momentum and trend for rupee remains bullish in near term.

The dollar slipped to about a three-week low. The dollar sagged amid an upswing in risk sentiment as mixed economic data in the U.S. bolstered bets that Federal Reserve tapering is still a long way off. Benchmark U.S. 10-year Treasury yields retreated below 1.30%. Elsewhere, Oil pared losses as stockpiles fell, but OPEC and its allies agreed to stick to their existing plan for gradual production hikes, which could pressure crude prices.

US Institute for Supply Management showed manufacturing expanded at a stronger-thanexpected pace in August even as a supply issues and labor shortages challenge the industry. U.S. Aug. ISM factory gauge rises to 59.9 from 59.5, est. 58.5. US ADP employment came in at 374k, compared to 625K consensus. The prior reading of 330k was also revised lower to 326k.

The White House on Wednesday stepped up efforts to get Congress to raise the federal debt ceiling, holding a public-relations strategy meeting with Senate Democratic aides ahead of a similar session with House staff planned for Thursday.

The euro-area economy’s rebound and a dramatic inflation surge has reignited the sparring among European Central Bank policy makers about when to shift the institution away from its crisis mode.

Traders are awaiting key U.S. jobs data Friday for more clues on the economic outlook and the likely timeline for a reduction in Federal Reserve pandemic-era stimulus.

USDINR

Technical Observations:

USDINR September futures formed bullish candle after sharp sell-off in last couple of days indicating consolidation before further downward move

The pair has been sustaining well below long term moving averages indicating bearish trend.

MACD has been placed below zero line with rising histogram indicating downward trend.

Momentum oscillator, stochastic has been placed in oversold zone trying to about to give positive cross over to average indicating short covering bounce.

USDINR September futures expected to open lower and move towards psychological level of 73 in today’s trade while on higher side 73.40 will act as an opportunity for fresh short sell.

USDINR September Daily Chart

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