Currency Market Updates: 30th June

Globally, German CPI inflation printed on 0.6% on m-o-m basis against previous reading of -0.1%. EUR/USD pair is trading flat near 1.1240 levels. US equity markets recovered sharply as Dow Jones rebounded to 25.595 levels, nearly 2.3% higher than Friday’s close. US has suspended special treatment for Hong Kong. On other hand, Chinese manufacturing and non-manufacturing PMI released better than expected at 50.9 and 54.4. It is noteworthy that other major economies are struggling with PMI data below 50.

On domestic front, Reserve Bank of India announced another round of operation twist, where in RBI will simultaneously buy (Long term) and sell (Short Term) government security worth INR 10,000 Cr. RBI will buy govt bonds of long maturities (2027,2029,2031,2033) and sell govt bonds of short maturities (2020 & 2021). Operation twist is intended to flatten the yield curve. Today (30^th June) RBI will revalue its FX reserve and balance sheet as per year ending process. Thus, today’s USDINR price closing and RBI Fixing rate hold a lot of significance. Interestingly, there has been a theory in markets that RBI has been proactively intervening in FX markets to keep rupee appreciation in check. Under the new Economic capital framework (ECF) higher value to USDINR may allow RBI to announce higher dividends. USDINR pair has immediate support near 75.35-40 levels and immediate resistance at 75.80-85 levels.

Currency Market Updates: 26 June

Globally, US equity markets recovered a bit after release of durable goods order data, which grew sharply by 15.8% m-o-m on a lower base. US dollar rebounded above 97 levels, gains in US dollar were further supported by concerns of second wave of covid cases. German consumer climate released at -9.6 against previous reading of -18.6.

On domestic front, Government bonds are trading with weakening bias as benchmark 10 year bond yield spiked to 5.91%. Indian rupee is trading with strengthening bias amid expectation of inflow of Jio-Facebook deal. Technically, USDINR pair has strong support near 75.40-75.45 levels, a break below might lead the pair to 75.00. USDINR pair immediate resistance at 75.85 levels.

Currency Markets Update 25 June

Globally, US equity markets fell more than 2.5% amid the concerns of second wave of corona virus. US dollar index recovered a bit to 97.20 levels, it will take further cues from US final GDP data for Jan-Mar’20 quarter, US economy is likely to contract by nearly 5%. German ifo business climate released at 86.2 against 79.7 previous month. 

On domestic front, IMF has sharply lower India’s GDP forecast, as it expect Indian economy to contract by 4.5% in FY21 against an earlier growth projection of 1.9%. As per IMF, impact of this pandemic is likely to felt through currency financial year, as it expect GDP to contract in all four quarters. On the other hand, Government has announced that urban and multi-state co-operative banks will be under supervision of RBI. This step has been taken as a course correction after the fall out of PMC bank. On flows front, USD 5.7 bn Jio-Facebook deal has been approved by CII, market is expecting that flow might hit on-shore in coming weeks. USDINR pair is trading flat near 75.67. USDINR pair has near support at 75.45-50 levels and resistance at 75.80-85 levels.

Currency Market Update: 24 June

Globally, manufacturing and service PMIs, although below 50, but beat the expectation in Europe and UK. EU’s manufacturing PMI released at 46.9 against expectation of 43.8 and service PMI released at 47.3 against expectation of just 40.5. Consequently, EUR/USD pair first spiked to 1.1350, before settling near 1.1320 levels. On the other hand, Boris Johnson announced that UK will withdraw lock down measures in July, to support economic activity.

On the domestic front, Indian and Chinese armies announced the disengagement at LAC border, leading to rally in rupee and equity markets. Nifty index is trading in green near 10,550 levels, multi month high. Partially convertible rupee gained nearly 30 paisa against US counterpart. The weakness in USDINR pair is further supported by a decline in the US dollar index, which fell to 96.6 levels. USDINR pair has near support at 75.45-50 levels and resistance at 75.75-80 levels.

Currency Market Updates: 23 June

Globally, Equity markets witnessed huge volatility after yet another miscommunication on US-China trade deal. Markets stabilized after Trumps tweet – “The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!” US dollar traded with weakening bias as EUR/USD rebounded to 1.1263. The gains in EUR/USD were further supported by a slight improvement in consumer confidence. Going forward, Euro will take further cues from flash PMI data, due to release later during the day.

On domestic front, 10 year benchmark bond yield spiked to 5.89 largely on supply concerns. Nifty index is trading flat near 10350 levels. Partially convertible rupee witness mild gains against US dollar amid broader dollar weakness. USDINR pair is trading nearly 20 paisa lower at 75.85. USDINR pair has immediate support at 75.70 and immediate resistance at 76.10.

Currency Market Updates: 22 June

Globally GBP/USD recovered a bit after the release of UK retail sales numbers. UK retail sales rebounded sharply by 12% on a lower base. China kept its monetary policy stance unchanged with 1 year lending rate at 3.85%.

On domestic front, Prime Minister, Modi tried to mellow down tension b/w India and China with ambiguous remarks at all party meet. It seems that tension b/w two Asian giants should gradually reduce in coming weeks. Nifty index surged to 10385 levels, led by gains in Glenmark Pharma, which received approval for coronavirus drug. USDINR pair is trading flat near 76.15. USDINR pair has support at 75.80 and resistance near 76.35.

Currency Market Update - 15 June

Globally, economic data continued to be terrible as UK’s GDP contracted by 20% in month of May. GBP/USD pair fell to its two weeks low of 1.2475. Cable came under further pressure amid the reports that UK-EU trade negotiation might not extend beyond deadline. Chinese industrial output increased by 4.4% in month of May against expectation of 5%.

On the domestic front, India released truncated CPI inflation numbers for second consecutive month, as “the price collection of Consumer Price Index (CPI) through personal visits of price collectors was suspended with effect from 19th March, 2020”. Food inflation remained elevated at 9.28% owing supply chain constraints in the economy. USDINR is pair is trading with a biddish bias at 75.80. USDINR pair has support near 75.60 and resistance near 76.10.