September 11, 2019

Daily Currency outlook

• PRODUCT 1

ICICI Securities – Retail Equity Research

Recommendation in the report
Currency pair Contract Action Price Target Stoploss Duration
US$INR September futures Buy 71.90 72.20 71.72 1 day
• PRODUCT 2

Research Analysts
Amit Gupta
amit.gup@icicisecurities.com

Gaurav Shah
gaurav.shah@icicisecurities.com
Forex and global equities
Spot Currency
• The rupee extended mild gains on Monday registering fourth session
Currency Close Pvs. Close % Change of consecutive gains. However Implied opening from forwards

Currency Outlook
US$-INR 71.71 71.73 -0.03 suggest it is likely to open weak today tracking gains in US$ as well as
Dollar index 98.33 98.28 0.05 steep rise in US yields
EUR-US$ 1.1043 1.1048 -0.05
• The dollar index closed mildly higher in yesterday session even as US
GBP-US$ 1.2350 1.2346 0.03 president has fired his National security advisor (NSA) Bolton.
US$-CNY 7.1127 7.1219 -0.13 Investors are gearing up ahead of crucial ECB policy meeting
US$-JPY 107.54 107.24 0.28 tomorrow. Chinese Yuan has seen some cool off in last few sessions
US$-CHF 0.9921 0.9921 0.00 and is currently trading at 7.11. EM currencies are likely to remain on
edge ahead of crucial ECB and Fed policy meetings this month

ICICI Securities – Retail Equity Research

Global Equity Indices
• Equity benchmarks gained for fourth successive session, a first since
Indices Close Pvs. Close % Change
Union Budget 2019. Nifty gained 0.5% to settle at 11003
Dow Jones 26909 26836 0.28
S & P 500 2979 2978 0.03 • Nifty midcap and small cap indices outperformed with gain of 1.2%
FTSE 7268 7236 0.44
and 0.8%, respectively resulting in positive A/D
DAX 12269 12226 0.35
HangSang 26781 26684 0.37
Nikkei 21514 21392 0.57
SGX Nifty 11017 10971 0.41

*Asian equity indices at 8.00 am

Source: Bloomberg, ICICI Direct Research
 Debt and FII activity

Benchmark yield • Domestic benchmark 10-year yields fell on Monday to 6.58%, while
Close Pvs. Close % Change
overall they remain in a range. Expectation of a rate cut in backdrop
of some recovery in US yields are keeping domestic yields in range
India 10-yr 6.58 6.60 -0.38
US 10-yr 1.73 1.64 5.34 • US treasury yields jumped sharply to 1.73% as investors remain on
Eur 10-yr -0.55 -0.59 -6.50 sidelines ahead of ECB policy meeting. Also fresh Government and
UK 10-yr 0.64 0.59 8.12 corporate offerings increased the concerns over supply and
JPY 10-yr -0.22 -0.25 -11.95 weighed on bond prices

Commodities • Gold extended profit booking for fourth session with non-interest
Close pvs close % change
paying asset down by over 4.25% in last four trading sessions.
Gold 1486 1499 -0.89
Central bank policy meet outcomes crucial for further moves in gold

ICICI Securities – Retail Equity Research

Copper 261.1 261.1 0.00 • Oil closed slightly lower in yesterday session ahead of US weekly
Brent 62.4 62.6 -0.34 inventory report. It is likely to show stock drawdown of 2.65 mb as
against previously 4.77 mb drawdown

FII Activity
• Foreign institutional investors (FII) were net seller to the tune of
Segment Purchase Sell Net | crores
| 608 crore on September 6, 2019
Equity 3220 4472 -1252
Debt 1756 1112 644 • FIIs have been net sellers of more than | 3039 crore in September
Net -608 2019

Source: Bloomberg, ICICI Direct Research, CDSL

INR futures and Outlook

Currency futures on NSE • The dollar-rupee September contract on the NSE was at
(%) change 71.84 in the previous session. Open interest declined
Contracts LTP chng (%) OI Vol
OI Vol 3.49% in the previous session
September
October
71.84
72.12
0.00
0.01
3111375
447179
1487880
241258
-3.49
3.51
-9.99
-1.60
•c
• We expect the US$INR to find support at lower levels.
Utilise downsides in the pair to initiate long positions
Sep-Oct -0.28 - - 1246622 - 83.79
Oct-Nov -0.22 - - 225828 - 93.60

Pivot levels US$INR Strategy

ICICI Securities – Retail Equity Research

Futures S2 S1 Pivot R1 R2 US$INR September futures contract (NSE)
US$INR (Sep) 71.55 71.70 71.79 71.93 72.02 Buy US$ in the range of 71.88 -71.92 Market Lot: US$1000
US$INR (Oct) 71.82 71.97 72.06 72.21 72.30 Target: 72.15 / 72.25 Stop Loss: 71.72
EURINR (Sep) 78.99 79.16 79.30 79.47 79.61 Support Resistance
EURINR (Oct) 79.48 79.65 79.78 79.95 80.08 S1/ S2: 71.95 / 71.80 R1/R2:72.20 / 72.30
GBPINR (Sep) 87.21 88.01 88.48 89.29 89.75 *Recommendation initiation message shall be broadcasted on iclick2gain at relevant prices
GBPINR (Oct) 87.69 88.47 88.92 89.70 90.15
JPYINR (Sep) 66.89 67.05 67.21 67.36 67.52 Note: The given recommendation in this report is intraday and should not be
linked with positional view & recommendations given in Monthly currency
JPYINR (Oct) 67.32 67.44 67.57 67.70 67.83 Derivatives and Positional Currency report which may have different view.

Source: Bloomberg, ICICI Direct Research

US$INR Spot currency

US$INR Spot

ICICI Securities – Retail Equity Research

Strategy update
Date Currency pair Strategy Rec. Target SL (P/L)* Comment
9-Sep-19 US$INR Sell US$INR 71.79 71.62 71.91 140 Exit in profit

Source: Bloomberg, ICICI Direct Research

Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com

ICICI Securities – Retail Equity Research

ICICI Direct Research Desk,

ICICI Securities Limited,

1st Floor, Akruti Trade Centre,

Road No 7, MIDC,

Andheri (East)

Mumbai – 400 093

research@icicidirect.com
DISCLAIMER

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