9 Jul 2013
Flash: Buy USD/INR targeting 63.00- JPMorgan
FXstreet.com (Barcelona) - The financing side of INR’s current account has become more fragile across all key channels, leading Daniel Hui and Bert Gochet, Strategists at JPMorgan, to recommend buying the USD/INR 3m NDF targeting 63.00.
Attractive carry and policy reform initiatives, both of which attracted significant portfolio and short-term inflows are no longer supporting the Indian Rupee, the Strategists say, as the global backdrop shifts, concluding that "INR is left with a large current account deficit in an increasingly fragile funding environment."
Hui and Goche note "significant foreigner overweight (in absolute and relative terms) across FX, bond, and equity markets to be a source of future deficit funding vulnerability", adding that "a funding shortfall will put both FX reserves and the INR under pressure. Policy will at most manage a continued depreciation trend."
Attractive carry and policy reform initiatives, both of which attracted significant portfolio and short-term inflows are no longer supporting the Indian Rupee, the Strategists say, as the global backdrop shifts, concluding that "INR is left with a large current account deficit in an increasingly fragile funding environment."
Hui and Goche note "significant foreigner overweight (in absolute and relative terms) across FX, bond, and equity markets to be a source of future deficit funding vulnerability", adding that "a funding shortfall will put both FX reserves and the INR under pressure. Policy will at most manage a continued depreciation trend."