Tuesday 25 August 2020

Currency Market Updates: 25 Aug

 

Globally, US equity markets rallied more than 1% after the positive news regarding US-China phase 1 trade deal. EUR/USD pair is trading flat near 1.1815 levels amid lack of key economic data from Eurozone and US. USD/JPY pair is trading in tight range between 105.69-106.10 levels.

On domestic front, RBI has announced INR 20,000 Cr bond operation twist; RBI will simultaneously buying long term (2024-2032) securities and selling short term (2020) securities. It seems that RBI is uncomfortable with spike in India’s 10 year bond yield, which had rallied to 6.22%. On currency front, partially convertible rupee witnessed sharp gain on chunky inflow coupled with lack of volume and peculiar absence of RBI. It is noteworthy that USDINR market depth has certainly reduced in covid enforced truncated market environment. Thus accentuating one-off volatile events in rupee markets. Technically, USDINR pair has given a break-down of contracting triangle formation. USDINR pair has immediate resistance at 74.50 levels and immediate support near 74.08-10 levels. Intraday range seen as 74.08-74.50

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