IGI Logo

GBPINR Strategy

Sell GBPINR November Futures around 103.10-103.20 for target of 101.70 with Stop loss 103.90

Rationale:

The pound is expected to trade with a negative bias on strong dollar, worries over rising Covid-19 cases in the UK and concerns over post-Brexit wrangling between EU and UK and fishing dispute with France. France has seized British trawler fishing in its territorial waters without licence. Additionally, expectation of disappointing economic data from UK will hurt pound. However, sharp fall may be cushioned as investors will remain cautious ahead of Bank of England monetary policy meeting. BoE is likely to keep benchmark interest rates unchanged. More focus will be on statements from the central bank to get clues on future monetary stance. Any hawkish statement will be supportive for the sterling.

Rupee likely to trade in range of 74-70-75.40 levels…

* The rupee appreciated last week amid weakness in dollar and softening of crude oil prices. However, sharp gains were capped on risk aversion in the domestic markets and persistent FII outflows

* Dollar in early trading part of the week decline on a surge in stock markets and mixed batch of economic data. However, in the later part it pared all its losses on a surge in US treasury yields and as Core PCE price index showed inflation continued to rise faster than Fed’s target

* We expect the rupee to trade in a range of 74.70- 75.40. Pessimistic domestic market sentiments and FII outflows will hurt rupee. Additionally, investors will remain vigilant ahead of US Federal Reserve monetary policy meeting, Opec+ meeting and India’s trade deficit data. However, possible RBI intervention may prevent sharp fall in rupee

Pound expected to slip till 102.50

* Euro depreciated by 0.74% in the previous week amid strong dollar and disappointing economic data. However, sharp downside was capped as European Central Bank kept its monetary policy unchanged as expected. Further, ECB president Christine Lagarde signalled that decline in inflation would take little longer time than expected

* Euro is expected to trade with a negative bias mainly on the of strong dollar and divergence in monetary policy. Investors will remain cautious ahead of US Federal Reserve monetary policy meeting to get details on tapering of bond purchasing program like when will it start and the pace of tightening. However, sharp fall in Euro may be cushioned on expectation of improved economic data. EURINR (November) expected to trade in a range of 86.70-87.80

* Pound depreciated by 0.44% in the preceding week mainly on the back of strong dollar, worries over post-Brexit trade deal and concern over rising Covid-19 infections. However, sharp fall was cushioned on improved economic data from Britain and as British finance minister Rishi Sunak in his budget announced stronger economic growth and lower public borrowing forecast

* Pound is expected to trade with a negative bias on strong dollar, worries over rising Covid-19 cases in UK and concerns over post-Brexit wrangling between EU and UK and fishing dispute with France. However, sharp fall may be cushioned as investors will remain cautious ahead of Bank of England monetary policy. Any hawkish statement will be supportive for sterling.

To Read Complete Report & Disclaimer Click Here

https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

Above views are of the author and not of the website kindly read disclaimer