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Rupee heads for Second Weekly Gains - HDFC Securities

Indian rupee expected to open tad lower following weaker Asian peers. The momentum and trend for the local unit remains bullish until it fell below 74.10 while on higher side trading below 72.90 open for 72.70 and 72.30 level. Market is expecting good inflows through bond issues from few big corporates

Rupee heads for the second weekly gains following broad-based weakness in dollar index and rebound in risk-sentiments. The domestic currency has gained five out of last six currencies. Spot USDINR ended at 73.07 from previous close of 73.09. The pair hover in the range of 73.15 to 73 range through the day before closing at 73.07. It is down 0.8% so far this week; benchmark stocks index gains 0.9% Thursday.

Indian bonds gain for a fourth day amid strong investor appetite and favorable global factors like lower U.S. yields. The 10-year G Sec yields down 3bps to 6.17% and 5-year yield falls 2bps to 5.59%

There's a seismic shift underway in money markets, the excess dollar demand which we have seen for years has been in verge of gone. For years, the premium paid for dollars over the euro, Japanese yen and so on in the cross-currency markets has been negative, indicating extensive demand for greenbacks. Now, these so-called crosscurrency basis swaps are on the verge of turning positive in a major shift for money markets

The dollar fell to the lowest since Aug. 6 as the risk-on mood prompted by dovish Federal Reserve signals continued, even after marginally better-than-expected initial jobless claims. Traders are looking ahead to further data to be released Friday, including August non-farm payrolls.

USDINR

USDINR September futures formed inside bar indicating consolidation

The pair has been trading well below 21 DEMA with lower top lower bottom formation on major time frames.

Momentum oscillator, fast stochastics also vacillate in oversold zone and currently placed around 5 indicating highly oversold condition

USDINR September futures expected to show some short covering bounce with higher side resistance at 73.55 and support at 73.10.

USDINR September Daily Chart

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