J Powell’s comment that banking regulations are already too tough indicate one of the expectations markets had from the Trump administration, i.e., of toning down restrictions on the financial sector, consequent to which US stock markets rallied. More republicans are likely to vote for the tax bill as differences get reconciled which led to a mild dollar strength except against GBP. Reports suggest that UK and EU have in principle agreed to a Brexit deal which led to the cable rallying. North Korea missile test has not resulted in a risk off as Korean equities are flat only.
Overall the risk on environment continues with a slight correction in the dollar weakness trend. USDINR 1m NDF is trading 1p left while EM currencies have registered a mild depreciation since yesterday evening. USDINR traded at 64.32 overnight while Nationalised banks bought the pair aggressively yesterday at 64.35 to prevent further appreciation. CMP 64.46, Range 64.55-64.35.
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