The USD weakness or Euro strength trend seems to have ended for now as markets took reverse positions for the first time. Ahead of the Jackson hole this weekend we might see further profit taking in Euro expecting Draghi to express concerns on an appreciating Euro after ECB minutes signalled the same last week. One can expect more comments on NK-US standoff given the military drill between the latter and SK.
USDINR 1m NDF is trading 6p left indicating some offshore selling pressure. News paper reports indicate that FDI inflows for an ecommerce company and a private oil company can lead to some INR appreciation. Asian currencies are largely flat overnight giving little direction to INR. Equity markets seemed to have stabilized post the small correction in August although. FPIs continue to pour money in India debt wherever limits are available while equity markets continue to see chunky outflows. Geo political news could create moderate risk off given SK-USA joint drills and India-China standoff, apart from which the view on INR remains constructive. CMP 64.06, Range 64.15-63.95.
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