INR opens mildly stronger at 69.42 as against Friday’s close of 69.47. Today the range could be 69.20 to 69.50. We believe that for sometime, INR could be very range bound and trading between 69.0 and 69.60. In this range, we suggest long term export hedging at upper end of the range and import hedging for 2-3 days payment at lower end of this range.
On Friday, US non-farm payroll came much below expectations and it further increased probability of US Fed cutting interest rates in this year.
Over the weekend, Trump dropped tariffs on Mexico citing strong progress in the discussion. This development has led to strong uptick in Asian equity markets and should rub off on Indian equities as well. However Indian equity market has to see big interventions to justify valuations and see further growth. Hopefully govt to acknowledge this and take appropriate steps.
Crude saw some small relief rally and is now at 63.5. It has to close above 65 for this small uptick to sustain or else it could again fall back to 60