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Rupee to start a new month on the front foot

Rupee expected to open slightly higher following foreign fund inflows and risk-on sentiments. The one month forward USDINR is quoting 5 paise lower from yesterday’s 5pm (IST) level. Traders remained cautious ahead of central bank’s policy meeting scheduled on Friday while better than expected growth number could be the reason to open higher for rupee. However, market is already looking beyond the numbers as April to June quarter number might be disappointing following surge in record virus cases and lockdown. Today’s number of manufacturing PMI for will be looked in to for future path of growth.

Indian rupee snaped three days winning streak and drops of 0.26% to 72.62 a dollar, most in Asia as market speculated over possible intervention by the central bank.

Technically, spot USDINR is having support at 72.27 and resistance at 72.30 with bearish bias.

Indian bonds decline after the government announced extra debt sales of 1.58t rupees ($22b) for the current financial year to compensate states for a shortfall in nationwide consumption-tax collections. India’s economy expanded faster than expected last quarter before a resurgent coronavirus pandemic unleashed a new wave of challenges. Gross domestic product rose 1.6% from a year earlier in the three months ended March, the number marks the second straight quarter of expansion following a rare recession. However, the economy was into an unprecedented 7.3% contraction for the full fiscal year ended March

Indian bonds decline after the government announced extra debt sales of 1.58t rupees ($22b) for the current financial year to compensate states for a shortfall in nationwide consumption-tax collections. India’s economy expanded faster than expected last quarter before a resurgent coronavirus pandemic unleashed a new wave of challenges. Gross domestic product rose 1.6% from a year earlier in the three months ended March, the number marks the second straight quarter of expansion following a rare recession. However, the economy was into an unprecedented 7.3% contraction for the full fiscal year ended March

China forced banks to hold more foreign currencies in reserve for the first time in more than a decade, its most substantial move yet to rein the surging yuan. The nation’s financial institutions will need to hold 7% of their foreign exchange in reserve from June 15. The move effectively reduces the supply of dollars and other currencies onshore, putting pressure on the yuan to weaken.

USDINR

USDINR June futures formed inside candle suggesting consolidation. The pair has been trading well below short term moving averages.

Momentum oscillator, RSI of 14 days period given positive cross over and exited from oversold zone which could be first sign of reversal but for the confirmation price need to be above 73.30 level.

USDINR June futures expected to trade with bearish bias and selling below 72.25 push towards 72 level while 73.30 remains near term resistance.

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