Forwards that are not deliverable show the rupee
- After opening at 83.4325 against the US dollar in the previous session, USDINR will open almost flat.
- The NSE June USD/INR monthly futures expire at 12.30 p.m. IST, which dealers said might cause choppy rupee price action.
- To strengthen the rupee, the Reserve Bank of India (RBI) sold June USD/INR currency futures, which it most likely rolled over to July.
- Banks had engaged in arbitrage by purchasing June currency futures and selling them in the over-the-counter (OTC) market in place of the intervention. The OTC market positions that have been sold must be settled at the daily fixing rate set by the RBI.
The daily fixing rate is used to settle June currency futures.
- A currency trader at a bank stated, “There was a lot of action yesterday for today’s fixing due to this.” According to him, the Wednesday fix was dealt at a premium of 0.30 paisa, suggesting that there was interest in purchasing dollars at the fixed rate.
- In the meanwhile, the prospect of dollar inflows from India’s June 28 participation in the JPMorgan emerging market debt index is likely to strengthen the rupee throughout this week.
- “While you can’t be sure of quantum and the timing of the flows, it makes sense from the risk-reward point of view to be short (on dollar/rupee) right now,” the trader in currencies said.
Important indicators:
- ** One-month forward premium at 7.5 paise for onshore transactions; one month forward non-deliverable rupee (INRNDFOR=) forward at 83.52
- ** The dollar index DXY remained mostly stable at 105.66.
- ** Futures for Brent crude (BRN1!) are rising to $85.22
- ** Ten-year U.S. note yield at 4.2650%
- ** As per NSDL statistics, foreign investors acquired a net $1033mln worth of Indian shares on June 24
- ** NSDL data indicates foreign investors acquired a net $55mln worth of Indian bonds on June 24
Source:
tradingview
