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Dollar Steady ahead of FOMC Outcome - HDFC Securities

Rupee expected to open steady inline with other Asian currencies. Forex and risky assets seem to be treading water before the Fed meeting Wednesday. The sentiments remain weak for local currencies as the Covid-19 outbreak keeps getting worse, with signs the country is running low on vaccines.

A relatively quiet session saw rupee float a bit higher following weaker dollar index and rebound risk assets. Spot USDINR started the week on back foot and closed at 74.73 with loss of 29 paise or 0.39%. The pair is expected to trade within range of 74.50 to 75.20 ahead of April month derivative expiry tomorrow.

Asian stocks are set for a muted open as the earnings season unfolds and amid expectations the Federal Reserve will remain accommodative at its meeting this week despite robust growth. Treasuries and the dollar were steady. The U.S. 10-year Treasury yield hovered around its 50-day moving average, well below last month’s peaks.

The Federal Reserve is expected to begin trimming its $120 billion in monthly asset purchases before the end of the year as the U.S. economy recovers strongly from Covid-19.

The pound advanced; the U.K. economy will see “very rapid growth at least over the next couple of quarters,” Bank of England Deputy Governor Ben Broadbent told.

The Bank of Japan left its 10-year bond yield target unchanged at about 0% after concluding its two-day meeting on Tuesday. The central bank also kept the Policy-balance rate at -0.1% with votes 8-1. BoJ sees FY21 core CPI at 0.1% vs 0.5% previously and revised FY21 GDP at 4% from previous 3.9%

USDINR

USDINR May futures facing resistance at 75.20, the downward slopping trend line on hourly chart.

It has been trading below 21 EMA on hourly chart.

Momentum oscillator, stochastic is placed in oversold zone, suggesting consolidation in today’s session.

+DI is placed below –DI and ADX line is weakening indicating weakness.

USDINR May futures expected to consolidate in the range of 74.70 to 75.20 in coming days.

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