Not much came out from the meeting between Abe and Trump and
therefore I would concentrate on price action on USDJPY this week to understand
the implication of the meeting, if any. Yellen speaks tomorrow in front of the
Senate and basis data and other recent FED speakers I would think that Yellen
might want to increase the rate hike probability for March (currently at 28%)
pushing dollar index higher. Market now seems to be focussing on the tax cuts
that Trump promised last week, which is kind of putting the Trump trade back on
track and could push yields, equities and dollar index higher.
In spite of the dollar strength and EM currency weakness
USDINR might not go substantially higher today as NDF 1m continues to trade 7p
left, which has been the driving force for the pair on the lower side. Equity
markets in Asia are supported as Indian bond yields have stabilized after the
post policy sell off last week. We might have seen the bottom for USDINR and
the up move will be supported by the moderate dollar strength but this could
happen later in the week. CMP 66.96, Range 67.05-66.80.
No comments:
Post a Comment