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Currency Movements

• The Indian Rupee could start today on firm notes following positive global cues with strong Asian markets.

• Earlier, The Indian rupee fell as broad dollar strength weighed on emerging Asian currencies, but losses were capped by the potential RBI intervention. The RBI has said they are regularly intervening in the market, and some inflows are also coming fromthe FDI route.

• The dollar rose against all its Group-of-10 peers as investors awaited a speech by Federal Reserve Chair Jerome Powell which may reaffirm the US central bank’s hawkish bias.

• Yields pulled back Wednesday, with the 10-year US rate down 8.6 basis points to 3.264%. The 2-year Treasury yield slipped to 3.45%, below its multi year high and below its highest level of Tuesday at about 3.52%. The U.S. dollar hit a new 20-year high on Wednesday justshy of the 111 level.

• However, The dollar remains underpinned by the consensus that Powell will continue to put emphasis on inflation and on expectations for a 75-basis-point rate hike this month.

• The yen headed for a fourth day of losses after verbal intervention from Japanese authorities failed to arrestits slide.

• Asian markets rebounded Thursday from the lowest level since 2020 but the move trailed a Wall Street rally as the dollar renewed its climb and crude oil edged higher.

Technical Observations:

USDINR

USDINR September futures formed bearish candlestick patterns after Doji candlestick pattern considered as reversal in trend.

• Long unwinding has been seen on Tuesday as the pair declined along with the open interest.

• Momentum oscillator, Relative Strength Index of 14 days period made a negative divergence and exited from overbought zone indicating weakness.

• The Direction movement is still showing pressure on the prices over range bound trading.

• We expect USDINR to trade with negative bias with support at 79.80 and resistance at 80.20 for the day.

USDINR September Futures Daily Chart

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