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INR: JP Morgan Re-Engage With Short CNH/INR

INR

With political uncertainty having peaked in India, JP Morgan re-engage with their preferred Asian carry trade in CNH/INR shorts. JP Morgan enter short 1y CNH/INR forward/NDF at 11.98 (target: 11.20, stop: 11.75, spot ref: 11.49)

  • They say the RBI is likely to continue anchoring the INR despite a turning trade balance, while cleaner positioning offers attractive entry levels. Meanwhile, the CNY is likely to drift weaker with little risk premia priced for looming geopolitical risks amid seasonal dividend outflows.
  • JPM add that CNH/INR shorts offer the most attractive carry to vol ratio in the FX complex, often delivering more than that alongside a defensive negative beta to cyclical proxies

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