Thursday, February 15, 2018

INR Update: The writing is on the wall for the dollar  

US CPI strengthened the case for 4 rate hikes this year as yields pushed higher. The markets which were buying the dollar as the yields rose and curve steepened, looked through the noise and beyond, and let’s say for the sake of rationalizing, focussed on the rising fiscal deficit in the US and sold the greenback. The u turn in sentiments yesterday makes it clear where the dollar is heading, CPI was the last piece of information to which the USD could have held on but now that it’s not helped, I would say we are headed for a convincing break of 88.5 on the dollar index which opens the door for another 2% kind of move lower.

 

USDINR 1m NDF is trading 2p left as EM currencies appreciated on the back of dollar weakness. Equities in Asia are in the green as markets moved contrary to rising yields and with the broader theme of dollar weakness and higher equities. Flows into equities and debt have largely been in the negative. CMP 63.95, Range 64.01-63.82.

No comments:

Post a Comment