Globally,
US FED meeting minutes suggested that FED members see little need for further
easing. Current monetary policy stance is appropriate for moderate risk, strong
labor markets and 2% inflation outlook. On the other hand, US house passed Hong
Kong rights bills, which might complicate the trade talks between US and China.
Further reports suggested that US, China phase one deal could slide into next
year. Consequently, US 10 year bond yield fell further below 1.73%, USD/CNH
spiked above 7.04 handle and USD/JPY slipped below 108.50.
On
the domestic front, Government approved strategic disinvestment in BPCL and
other four PSUs. It is noteworthy that Government had set INR 1.05 trillion
disinvestment target for the current fiscal. Domestic yield eased further below
6.47% tracking global yield movements.
USD/INR pair opened the session on a flat note at 71.82 against previous close of 71.81. The partially convertible rupee is likely to trade with weakening bias amid spike in USD/CNH pair. USD/INR pair has support near 71.65-71.70 levels and first resistance at 71.98-72.05 levels and second resistance at 72.25. Range for the day 71.67-72.05.
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