ICICI Direct, US dollar continued its rally and rose 0.26% yesterday as elevated inflation fuelled expectation of a rate hike sooner than anticipated to combat surging inflation.
November 12, 2021 / 08:18 AM IST
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ICICI Direct’s currency report on USDINR
US dollar continued its rally and rose 0.26% yesterday as elevated inflation fuelled expectation of a rate hike sooner than anticipated to combat surging inflation. US inflation remained above 5% for a fifth successive month. However, further upside was capped amid a rebound in stock markets • Rupee future maturing on November 26 depreciated by 0.10% yesterday on strong dollar and FII outflows. Further, the rupee slipped on risk aversion in domestic markets • The rupee is expected to depreciate today on the back of strong dollar and persistent FII outflows. Further, market participants fear that elevated inflation may push the Fed to hike rates sooner than expected to address stubbornly high inflation, which, in turn, may prompt foreign investors to pump out liquidity from emerging markets. However, a sharp fall may be prevented on a rebound in global stock markets and as India’s inflation is projected to ease and remain in RBI’s comfort zone for a fourth consecutive month.
Intra-day strategy
| US$ INR November futures contract (NSE) | |
| Buy US$ INR in the range of 74.48-74.50 | |
| Target: 74.80 | Stop Loss: 74.35 |
| Support: 74.40/74.35 | Resistance: 74.75/74.80 |
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