IGI Logo

Rupee advances to one month high on inflows

* Indian rupee expected to open right in line with Asian peers following overnight weakness in dollar after Yellen’s clarification on interest rate. Rupee advanced to its highest level in about a month as the USDINR forward premiums remain elevated amid a glut of greenback in banking system. Spot USDINR fell for the second day in row to close at 73.86 with loss of 7 paise or 0.09%. Technically, spot USDINR is having support at 73.70 followed by 73.56 and resistance at 74.28. 

* USDINR 1-month premium fell 30bps to 8.13% Tuesday still are up more than 200bps in the first two days of this week and climbed as much as 156bps earlier, with traders citing inflows related to PowerGrid InviT IPO, for which foreign funds may have sold dollars in spot and taken a contrary position in forwards.

* Indian bond traders will also watch if the RBI indirectly steps in to buy bills at an auction later on Wednesday after purchasing in the previous two weeks. 10-year yields rose 1bp to 6.02% on Tuesday.

* From the data bucket and events front, Central bank Governor Shaktikanta Das to make unscheduled speech as ferocious new coronavirus wave devastates the country. India’s federal cabinet to meet and Markit India Services PMI and Composite PMI for April to be released today.

* U.S. equity futures faltered and Asian stocks were set for a volatile open after a selloff in technology shares, amid comments from Treasury Secretary Janet Yellen that rates will likely rise as government spending ramps up and the economy responds with faster growth. In a subsequent interview, she clarified, saying she wasn’t predicting or recommending rate hikes. 

* Commodities jumped to their highest in almost a decade as major economies rebound from the pandemic. The Bloomberg Commodity Spot Index, which tracks prices for 23 raw materials, rose 0.8% Tuesday to its highest since 2011 and has climbed more than 70% since March 2020. This could add worries to nations like India who already battling against covid19 and higher commodities prices will hurt the balance sheet.

USDINR

USDINR May futures drifted lower and breached the previous top support. The pair is now having support at 73.55. the 50 and 100 days simple moving average.

Momentum oscillator, relative strength index of 14 days period of turned weak suggesting continuation of downward momentum.

MACD also given negative cross over and heading downward towards zero line indicating weaker trend.

USDINR May futures expected to trade with negative bias and has support at 74 followed by 73.55 while continue to resist at 74.70

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