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Market Roundup

Most Asian currencies were stronger against the dollar on Tuesday, led by Taiwan’s dollar amid a boom in the local stock market. The yuan gained in both onshore and overseas trading to appreciate past the daily currency fixing set by the PBOC for the first time since July.

However, the rupee, which is currently trading close to its all-time low, has not benefited from the surge in Asian currencies caused by the U.S. dollar's decline in anticipation of a rate reduction by the Federal Reserve next year.

S&P Global Ratings states that because of India's focus on its own domestic market, the country's economy will be somewhat less affected by global uncertainty.

India’s sovereign notes fell for a second straight session amid fears of bond sale in the open market by the central bank to keep liquidity conditions tight.

The FOMC united around a strategy to “proceed carefully” on rate moves and make any further hikes contingent on progress toward their price target, minutes from their last meeting showed.

Fed officials stressed that while inflation had moderated in the past year, more evidence was needed for them to be confident that the 2% goal was within reach. The dollar index recovered from a multi month low post-FOMC meeting minutes.

The USD/INR pair has traded within a range of 82.80–83.40 since September, and we anticipate the same trend will continue in the short term. Implied openings from forwards suggest the spot may start trading around 83.33

USDINR

Technical Observations:

USDINR Nov Fut consolidated in the upper end range, and the pair retested short-term resistance at 83.40

The pair is settled above the shortterm moving average of 21 days.

Momentum Oscillator, RSI of 14 days period turned positive and is placed above 50 on the daily chart.

MACD has been placed above a zero line with a flattish note.

Long unwinding has been seen as price along with open interest fell

Short Term Trend: Neutral

Expected Trading Range: 83.15 to 83.55

Intraday Recommendation: Sell USDINR Nov. Fut. at 83.36/83.48 SL 83.53 Target 83.16

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