Rupee opens lower tracking weak Asian currencies

Abhishek Goenka IFA Global

The global risk sentiment is a little downbeat despite no overnight global cues as US was shut on account of a holiday.

Rupee traded in a narrow range yesterday in thin liquidity. There was some selling seen towards the end for carry. We may see some covering on open today which could push spot higher. The trading range for the Rupee over the last 7 sessions has been 71.20-71.50. The realized volatility has been extremely low. The recent trading range is expected to hold this week as there are no major cues in the form of data and events and Wednesday and Friday are trading holidays.

There was a flash on Cogenesis yesterday which quoted an official as saying that bond index inclusion could be announced soon by the RBI. This triggered a few stops below 71.30 amid carry related selling.

The USDINR pair likely range would be 71.18-71.50 with sideways price action. Asian equities are trading weak (~ -1%). Asian currencies are trading a tad weak against the US Dollar (~ -0.1%).

The inflows that are lined up over the next month are pertaining to Brookfield's acquisition of Reliance's tower assets and SBI Cards IPO.

Strategy: Exporters are advised to cover partial long term exposure around 71.45 levels. Importers are advised to cover one month exposure on dips towards 71.30. The 3M range for USDINR is 70.00 - 72.50 and the 6M range is 69.50 - 73.50.

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Author

Abhishek Goenka

IFA Global

Mr. Abhishek Goenka is the Founder and CEO of IFA Global. He pilots the IFA Global strategic direction with a focus on relentlessly improving the existing offerings while constantly searching for the next generation of business excellence.

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