Trump seems to be having real problems, not just politically, but selecting and retaining people also, as he fired his communication director yesterday, who was hired just 10 days ago. Consequently in spite of a stronger housing data print the dollar weakened as EURO closed the month, above 200 week MA. USD Index faces strong support near 91.8 (CMP 92.9) and a break below that on weekly basis, can take the index to 89 levels. Today is a data heavy day with manufacturing PMIs in the EU and US, along with personal income and expenditure in the US. Price data in the US would be critical given the 4 months of weaker prints, and another weak print can drive yields substantially lower.
USDINR 1m NDF is trading 8p left, which is the most we have seen in a while. CNH is facing appreciation bias along with EURO gains, which should provide strength to INR as well. EM currencies have mildly appreciated overnight. Markets await RBI tomorrow while nationalized banks continue to aggressively buy USDINR. I would think that a breakout on the lower side is possible today given the USD weakness and policy tomorrow. CMP 64.14, Range 64.18-64.00.
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