The news about Trump junior’s Russian emails was there in the market since Monday. Post the FED speaker’s (Brainard, Harker and Kashkari) dovish comments, dollar sold off and yields fell. Today’s most important event is Yellen’s testimony and she would find it difficult to get off the hawkish rhetoric set out in the June FOMC. Brainard and Kashkari are 2 of the most dovish FOMC members therefore their comments yesterday was no surprise. Harker’s comments on inflation and hike could be a concern if Yellen also expresses doubts on the 3rd hike this year.
USDINR 1m NDF is trading 3p left more than what we have seen in the last week indicating offshore selling pressure on the pair. KRW and CNH both have appreciated overnight on the back of dollar weakness. Asian equities are flat to mildly positive. Nationalized banks continue to buy aggressively but looking at other EM currencies, RBI could allow a lower low today. CMP 64.57, Range 64.44-64.60.
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