IGI Logo

Rupee likely to extend winning streak - HDFC Securities

Indian rupee expected to start flat and expected to trade in tight range of 74.10 to 74.35 range. Local unit gained for second day in row to 74.19 following surge in domestic equities which trades near life high. Stronger yuan set by PBOC could also support the Asian currencies to add gains.

Asian stocks look set to track U.S. gains as strong corporate earnings and a commodity rally boost confidence in the economic recovery from the pandemic

It’s a weird day when stocks hit yet another record, but we also get one of the strongest ever auctions for short-term bonds while dollar stayed around 93. US Stocks finished modestly higher but off their best levels of the day, while Treasuries came under pressure with the 10- and 30-year yields rising four basis points each to 1.29% and 1.91%, respectively. WTI crude powered back to near $68 a barrel, extending its two-day rally to 8.5% after logging threemonth lows on Friday.

The dollar fell against most of its Group-of-10 peers and commodity currencies outperformed as investors waited for insights on the Federal Reserve’s policy path at its Jackson Hole conference later this week.

Euro edged higher after slipping as much as 0.2% to 1.1727, as euro sentiment in the front-end turned neutral. The euro briefly jumped following news that Germany’s Social Democrat political party led Chancellor Angela Merkel’s bloc for the first time in 15 years.

The slippage in the Spot Dollar index this week won’t be alarming to medium-term dollar bulls. Moderate trading volumes and bullish technical indicators point to the dollar retaining the uptrend which began in June. There is also the expectation of a good month ahead as September has recorded an average gain of 0.9% for the DXY over the past decade.

House Democrats clear path toward passing $3.5 trillion budget bill and infrastructure plan with 220-212 votes.

USDINR

Technical Observations:

USDINR August futures manage to close at previous bottom level after initial weakness.

It has been trading well below short term moving averages.

The pair has support around 74, the 61.8% Fibonacci retracement level.

Momentum oscillators and indicators are hovering near center line indicating consolidation in down trend.

USDINR August futures expected to trade with negative bias with downside support at 74.05 and resistance at 74.50

USDINR August Daily Chart

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