IGI Logo

New Quarter begins with Stronger Dollar

New quarter begin slightly different along with equities, dollar and crude oil heads higher which could be the cause of concerns for rupee. The dollar’s grinding advance against Asian currencies since the June Fed meeting has further to run. American traders may wary about leaving short USD exposure in the hands of Asia and Europe at weekend.

Asia’s much-touted high yielders, rupee appear to have met their match in the face of rising dollar rates. There aren’t many carry trades which can stand firm when short-term dollar yields are in the early stages of rising. The weight of asset allocation will shift to the dollar as a momentum play is simply too much for currencies outside the G-10 sphere to withstand. Most Asian central banks usually hike rates slowly and FX traders will factor that into a weaker Asian currencies.

The one month forward USDINR indicating flat opening for pair but the momentum remains on bullish side after upward range breakout. Spot USDINR ends at 74.56 gained 23 paise of one third of percentage points on Tuesday. Technically, the pair is having resistance at 74.80 and support at 74.30.

The dollar gained against all of its Group-of-10 currency peers as U.S. jobless claims figures released Thursday were lower than expected, potentially adding to pressure on the Federal Reserve may begin tapering asset purchases. WTI is holding around a session high after topping $75, to draw nearer to its October 2018 interim highs, on reports OPEC+ talks broke down after the UAE blocked a preliminary deal Saudi Arabia forged with Russia on output increases.

The Biden administration and global allies scored a major victory Thursday in their push for a more balanced international corporate tax system. The agreement remains well short of a done deal, with a handful of countries refusing to sign on.

An $11.5 billion sequential decrease in Reserve Bank Credit left interest bearing assets on the Fed balance sheet at $8.04 trillion, that’s up 20.7% on an annualized three-month basis, 13.4% YoY.

USDINR

USDINR July futures closed at upper band of the range, after forming Doji candlestick pattern indicating bullishness.

The target of Flag chart breakout comes around 76.

Short term moving averages are placed above medium term moving averages indicating bullish trend.

Momentum oscillators and indicators on daily and week time frame heading north indicating positivity for the pair.

Near term view for USDINR July futures remains bullish with resistance at 75.10 and 75.60 while it has support at 74.30.

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