Another hurricane warning in US resulted in insurance companies getting sold and an overall risk off tone. Korean concerns have not escalated while at the same time it has not receded either. FED speakers showed signs of doubts on further rate hikes but they both have been extreme doves, nevertheless the markets reacted taking US 10 Y yields to the lowest levels since Trump elections. Today US service ISM would be important along with the beige book release.
USDINR 1m NDF is trading 5p left while KRW has depreciated to 1136 levels. CNH and other EM currencies are largely flat to slightly stronger than yesterday. Asian equities are in the red with Hang Seng at -1%. Participants largely expect the September range for USIDNR to be 64.50-63.80 which would make me think that at every uptick from the current levels we would see exporter selling coming in. USD weakness and other EM currencies suggest that INR depreciation would be limited while technically a break above 64.30 can result in stop losses taking the pair higher to 64.40 in a hurry. CMP 64.24, range 64.30-64.10.
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