IGI Logo

Rupee has Chop and Noise in Last Four Weeks - HDFC Securities 

• Indian rupee started the week on a flat note ahead of RBI Monetary policy decision. The rupee has been consolidating in the range of 77.40 to 77.75 since mid-May month. Overnight weakness in equities, gains in the dollar index, soaring crude oil prices, foreign fund outflows and weaker peer currencies all will weigh on the rupee in the near term. The forward markets indicate spot USDINR could open 15-18 paise higher opening at domestic bourses.

• On Monday,spot USDINR closed at 77.63 almost unchanged fromFriday’s closes in a thin volume trade. Rupee traders will look forward to its monetary policy review on Wednesday, where it’s expected to raise interest rates after an out-ofpolicy hike in May. The sentiment remains bullish for USDINR as long as it holds the support of 77.30 while on the higher side 77.75 and 78 remain near term hurdles.

• India’s benchmark 10-year bond yield rose to the highest in more than three years as traders bet on a rate hike by the central bank this week. The 10-year yield rose 4bpsto 7.50% after gaining 11bpslastweek

• Stocks in Asia traded mixed Tuesday as a jump in Treasury yields fueled concerns that rising borrowing costs will weigh on earnings and induce a recession. The dollar gained as investors turn away from risk assets. The yen sank to a 20-year low.

• Treasuries added to losses thatsent five- and 10-year yields over 3% for the first time since mid-May ahead of a slew of new debt supply before crucial inflation data at the end of the week. The 10-year Treasury yield inched up after jumping more than 10 basis points as yields across the curve advanced at least seven basis points Monday

USDINR Technical Observations:

• USDINR June futures formed Doji candlestick pattern indicating indecisiveness among traders.

• The pair is holding support of 21 days exponential moving average i.e. 77.52.

• Derivative data indicates long buildup with rise in price and open interest while volumes stay low amid low volatility.

• Relative Strength Index of 14 day has given negative cross-over and divergence indicating weakness in the pair.

• MACD has given negative cross over and weakening indicatingweak trend.

• In the near-term, USDINR June futures is expected to trade in the range of 77.50 to 78.10.

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