Currency Trading Plan

USDINR:

The surprise of the day came from USDINR, as it managed to achieve significant gains despite the performance of the US Dollar Index. Interestingly, even the emerging market currencies, including the Chinese Yuan, demonstrated resilience today. Reports suggest that the central bank may have instructed banks to limit their engagement in offshore markets and decrease speculative activities. These measures are believed to have been taken by the RBI to prevent speculative pressure from diminishing the impact of their interventions. Further offshore gains are evident, with USDINR Aug futures on DGCX trading at 82.57, marking a 14 paise drop from the NSE closing. Support can be identified around the 82.40/45 levels.

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GBPINR:

The UK PMI figures came as a surprise to GBP bulls, as both the manufacturing and services indices have entered the contractionary zone. The impact of elevated rates on the economy has become evident, thereby diminishing the likelihood of aggressive rate hikes by the BOE. The Bank of England is treading carefully, navigating between a delicate economy and elevated inflation. Following the weak PMI data, GBPINR experienced a sharp decline of 1.30%. A modest recovery might be on the horizon, considering that the very short-term trend has been oversold, and the robust support zone of 104.40/50 comes into play. The overall range appears to be currently confined within 104.40 and 105.20.

EURINR:

Initially, the afternoon was marked by the discouraging flash PMIs from the Eurozone, which significantly impacted EURUSD. The confluence of a feeble EURUSD and a frail USDINR dealt a dual blow to EURINR, causing a nearly 1% decline. Nevertheless, with the commencement of the US session, a notable resurgence is observed in EURUSD. This shift can be attributed to the weakening US flash PMI figures, which are currently exerting pressure on the US Dollar.

JPYINR:

Following a disappointing flash PMI report from the US, USDJPY has undergone a decline. The subdued US bond yields are exerting a downward pull on USDJPY. Should this trend persist, there is a possibility of a gap-up opening in JPYINR.