In spite of news of delay in implementation of corporate tax rate cut US yields did not fall and neither did USD implying the current USD strength over Euro and GBP. Republicans want to vote on the tax bill by 23rd November and therefore I would expect that gradually over the next 2 weeks USD index could head to 96.5 from the current 94.9 levels. Volatility is expected to remain low today as there is no significant data or speakers lined up.
USDINR 1m NDF is trading 1p right while EM currencies have mildly appreciated since yesterday. Historically INR has benefitted from a rally in oil prices which is counter intuitive. Oil price rally indicates a risk on environment which boosts capital inflows into the country more than the pressure on trade deficit. Equities are in the green and post the push in USDINR due to a one off buying I would expect USDINR to test 64.50 levels again over the next week. For the day CMP 64.90, Range 64.95-64.80.
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