INR opens around 68.84 as against yesterday‘s close of 68.93 and today meet trade in a narrow range of 68.82 to 69.15. Now trading at 68.82 (Low of last few days).
Market is pricing a good budget and hence rupees seen no major weakness . We believe after the initial euphoria of budget is over some amount of rupee weakness could be seen. On budget day, we may see levels around 68.30-68.50. 10 year yields are also trading at low of 6.81 and US 10 year well at 1.95% (well below 2%)
For today, there is market talk of settlement of USD 750 million Bond of Adani Port and Economic zone. The inflow would keep INR trade with strength.
Overnight crude saw sharp dip below 63 levels, despite decline in US crude inventory. This shows that crude market is in a difficult environment and further lower levels around 60 could be seen very soon.
Today morning Asian Equities are mildly positive and CNY is again inching towards 6.90. For INR, weakness in CNY could be neutralised by drop in crude.
Suggest to pick long term export hedges at levels above 69.0 and import hedges could wait.