Buy USDINR; target of 65.05 – 65.10 | Ina000003197
Government bonds ended little changed in lacklustre trade, as investors deferred purchases ahead of a weekly debt auction. Also, political turmoil in the US could support bonds as yields remain on the backfoot • The benchmark 6.97% 2026 bond yield was almost unchanged at 6.68% in the previous session • Yield on the US 10-year rose mildly to 2.23% from 2.22% in the previous session.Ina000003197
The rupee marked its biggest single-day fall in nearly 21 months against US$, as political unrest in the US involving President Donald Trump dented investors’ appetite for risk assets • The US$ recovered slightly against major currencies due to profit booking and recovery in yields. Even though US$ weakened against majors, it strengthened against most emerging currencies as recent political turmoil in the US has weighed on risk-on sentiment. We expect the US$ index to find supports above 96.50 level in the near term.
US$/INR derivatives strategy Bonaz capital
In the currency futures market, the most traded dollar-rupee May contract on the NSE ended at 64.93. The May contract open interest declined 14.42% from the previous day • June contract open interest increased by 5.19% in the last session • We expect the US$ to find supports at lower levels. Utilise downsides in the pair to go long on the US$INR pair. Ina000003197