Monday 23 December 2019

Currency Market Update - 23-Dec: UK parliament passes Brexit Bill


US economy grew by decent 2.1% in the September quarter confirming outperformance amid struggling global growth. It is noteworthy that US had grown by 3.4% last year during the same period, underlines extent of slowdown in global economy. US dollar index spiked to 97.60 levels. Gains in US dollar were further supported by consumer spending data. US consumer spending grew by 0.4%, a near four month high. On the other hand, UK economy grew by just 0.4% in September quarter. GBPUSD pair could not sustain is intra-day gains despite UK parliament passed Brexit bill with thumping majority - 358 votes to 234 votes. Technically, GBPUSD has strong support at 1.2980. GBPUSD pair should consolidate near this support amid lack of economic data this week.

On domestic front, 10 year bond yields, which corrected nearly 18 bps to 6.57 in two days, will take further cues from result of Operation Twist. RBI is expected to receive strong interest in 6.45% GS 2029 security. USDINR pair opened the session on a flat note at 71.14 against previous 71.12. USDINR pair has first support at 70.97-71.00 levels and first resistance at 71.30-71.35. Range for day 71.04-71.35

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