ICICI Direct, The US dollar declined on retreat in US treasury yields and rise in risk appetite in the domestic markets.
May 05, 2022 / 08:36 AM IST
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ICICI Direct’s currency report on USDINR
The US dollar declined on retreat in US treasury yields and rise in risk appetite in the domestic markets. Yields fell after Fed Chair Powell said central bank officials are not considering a 75 bps increase. However, further downside was cushioned as the Fed raised its benchmark rate by 50 bps and said more half a point increases were on the table for the next couple of meetings. Additionally, Fed also announced a plan to shrink its $ 9 trillion asset portfolio • Rupee future maturing on May 27 appreciated by 0.14% on RBI’s surprise rate hike. Central bank raised its repo rate by 40bps to 4.4% • The rupee is expected to appreciate today amid retreat in US dollar. Further, rupee may gain strength on LIC IPO related inflows and as RBI surprised market by raising rates to tighten liquidity. However, sharp gains may be prevented on surge in crude oil prices. Additionally, investors will remain vigilant ahead of Opec+ meeting. US$ INR (May) is expected to trade in a range of 76.20-76.65.
Intra-day strategy
| US$ INR May futures contract (NSE) | |
| Sell USDINR in the range of 76.50-76.52 | |
| Target: 76.20 | Stoploss: 76.65 |
| Support: 76.30/76.20 | Resistance: 76.65/76.75 |
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