The markets are so uneventful that the mild dollar weakness yesterday was ascribed to day before yesterday’s news of Trump threatening to shut down the government if the congress doesn’t fund for the wall. Some market commentary suggests that recent changes in the Trump administration might make the President achieve political consensus more effectively than before. September will be a crucial month for USD as debt ceiling and budget clash with each other for political consensus while the FED has built expectations of balance sheet reduction. Today UK GDP and existing home sales would move currency markets.
USDINR 1m NDF is trading 7p left while EM currencies have moderately appreciated since yesterday. Asian equities are mildly in the green as geo political concerns have reduced. I would think markets will remain cautious ahead of Jackson Hole and USDINR shorts might cut positions during the day driving the pair towards 64.15+. CMP 64.04, Range 63.98-64.15.
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