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Rupee set for a muted starts

Rupee may have another quiet session ahead of US Non-farm payroll data and manufacturing PMI across the world. The forward markets indicating steady start for spot USDINR after mixed bag of economic data. Rupee posted its biggest monthly decline since March 2020 amid higher crude oil prices, foreign fund outflows and stronger dollar after Fed hinting for unwinding of stimulus. Over the quarter, the unit lost 1.7%, its worst quarterly fall since January-March 2020 when it tumbled 5.8%.

Spot USDINR, on Wednesday, ended at 74.33 with gain of 10 paise or 0.13%. Technically, the unit is still lacking the clear direction as it has been in range of 74 to 74.50 since last couple of days.

India’s current account deficit was $8.1 billion, or 1% of GDP, in the last quarter of the fiscal year ended March 31, 2021 vs a surplus of $0.6 billion year ago: RBI statement. The current account deficit primarily on account of a higher trade deficit and lower net invisible receipts than in the corresponding period of the previous year.

India’s eight core infrastructure output for May month printed at 16.8% from previous 56.1%. From the eight core industries steel, coal, natural gas, electricity, cement and petroleum product output rises as restrictions get eased.

Asian stocks looked set for a muted start as traders weigh concerns about the more contagious delta strain of Covid-19 and look ahead to a U.S. payrolls report. While the S&P 500 edged up overnight, rounding out one of the best first halves since 1998 for U.S. stocks, the recent spread of the virus variant is tempering some of the optimism around the global recovery.

Wall Street had another quiet session before Friday’s payroll report, rounded out with some impressive performance scopes for a range of assets as the first half crawled to a close. The greenback was among those. ICE’s Dollar Index ended June with the best monthly performance since November 2016, when Trump’s win in the presidential election ignited reflation trades.

USDINR

USDINR July futures formed Doji candlestick pattern on daily chart suggesting indecisiveness

The pair has been consolidating in the range of 74.25 to 74.70.

The pair has been trading well above short term moving averages.

Momentum oscillators and indicators on daily chart heading towards north indicating positive momentum going ahead

We expect USDINR July futures expected to trade in the range of 74.70 to 74.25.

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