IGI Logo

Rupee Could Remain Under Pressure As Crude Gains

* Indian rupee is expected to open higher following a weaker dollar index and stronger equities. However, surging crude oil prices and non-inclusion of Indian bonds in JP Morgan GIB lead to disappointment in expected inflows. The forward markets indicate spot USDINR could open around 81.45. The pair is expected to trade in the range of 81.10 to 81.80.

* JPMorgan refrains from adding India Securities to EM Bond Index. It kept India (INR) government bonds will remain on Index Watch for GBI-EM inclusion amid a lengthy investor registration process and the operational readiness required for trading, settlement and custody of assets onshore.

* The dollar dropped against all Group-of-10 currencies as traders grew skeptical of aggressive Federal Reserve rate hikes and unwinding of long dollar positioning ahead of payroll data on Friday.

* Asian stocks are geared up for a steady start after investors retreated from the US and European shares, reflecting worries that lower oil production will make the job of curtailing inflation even harder. The US 10-year surpassed 3.7%, after briefly dipping below 3.6% in the previous session.

* An OPEC production cut followed by deeper than expected drawdown in domestic oil inventories ignited more strength in the energy patch, as WTI crude climbed back above $88 a barrel for its best finish in three weeks.

* North Korea fired two suspected short-range ballistic missiles toward waters off its east coast, adding to a barrage of testsin the last two weeks.

* Global foreign-currency reserves are falling at the fastest pace on record as central banks intervene to support their currencies. Reserves have declined by about $1 trillion, or 7.8%, this year to $12 trillion. Part of the slump is simply due to valuation changes

Technical Observations:

* USDINR October future has been trading in the range of 81.50 to 82.10.

* The pair is in a process of forming a Bullish flag pattern on the daily chart and the breakout of the same can be confirmed above 82.10

* The pair is placed well above the shortterm moving averages.

* Momentum oscillator, RSI has given negative divergence and exited from the overbought zone indicating the nearterm weakness in the pair.

* Long unwinding has been seen with a fall in price and open interest.

* The pair is having support at 80.89, the 21 days exponential moving average on the daily chart.

* In the near term, USDINR October futures could trade in the range of 81 to 82.10.

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