Scotiabank Look To Sell Expected Fresh Leg Higher In USD/INR

Scotiabank suggest that “USD/INR is expected to trade higher towards the INR76.0-76.5 area in the very near term, considering the broad USD strength, India’s persistent equity outflows and bouncing oil prices. Life Insurance Corporation of India (LIC) has filed its draft share sale prospectus with the capital markets regulator SEBI, paving the way for India’s largest initial public offering (IPO). According to the draft IPO documents filed with the SEBI, the government will sell 316.25mn shares through an offer for sale (OFS), aiming to raise about INR750bn. The upcoming LIC IPO-linked capital inflows could provide a boost to the INR when the subscription period is announced. We look to sell USD/INR spot once the pair advances further and reaches the overbought area (likely at the INR76.5 level) as indicated by the RSI Index, with a target of INR74.5 of and a stop at INR77.5.”