After the convincing move yesterday and day before we can say that USD Index is convincingly trading below the 200 week moving average (92.57) and basis the Euro demand that has been seen in the price, I would think that we would close week below 92 (CMP 92.40) with Euro above 1.20. Trump made a unusually measured response against North Korea’s reckless missile test, perhaps indicating that the war of words is over. From here on either US would want to pursue North Korea diplomatically with decreasing tensions (more likely) or would take action against the non conforming state (unlikely in my view).
USDINR 1m NDF is trading 7p left with KRW stable at 1123 indicating reduced risk aversion than yesterday morning. CNH is below 6.60 which should reflect on INR sometime soon. September is the second most positive month for INR and with CNH appreciation we can see new lows on USDINR during the month. Asian equities are in the green and with dollar weakness in general uptick in USDINR should be limited. CMP 63.95, Range 64.00-63.85.
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