INR forecast: INR open stronger at 70.80 as against last week close of 70.99 and may trade the day between 70.60-71.10 under two way price action. An consistent trade above 71.00, could bring 71.40.
Although India’s GDP came in robust at 8.2% vs previous 7.7% on back of upbeat performance of manufacturing and construction section. While manufacturing sector grew double digit at 13.5%., construction saw strong recovery at 8.7%. Agriculture activities on other hand grew marginally at 5.3% from 3%.
As global narrative is still of risk aversion, good GDP numbers from India may not have sizeable cooling effect on INR.
Friday was weekly and monthly close and INR closed above important level of 70.80 and the pattern indicates further weakness.
Trump upped his ante on trade war by threatening to exit WTO. Asian equities are weak. CNY fixing is also on weaker side.
For any import of export hedging, suggest one month PLAIN options. And no exotic ones. This is because we expect major part of INR weakness should be done in Sept and after this some reversal could start.
Today U.S market will remain closed on account of ‘Labour Day’ celebration, hence liquidity may remain low and INR may trade in a range.