The Trump-Juncker conference has ended with a positive outcome where both the leaders agreed to discuss a path which would effectively lead to free trade between the EU and US. This development should prevent the ECB to talk down the Euro like they did in June 2018 as they would not like to perturb Trump and reignite the transatlantic trade war. Therefore I would now change my view and expect EURUSD to head higher towards 1.18+ after the ECB today evening. Post this the focus shifts to US GDP tomorrow wherein the forecasts already seem to be factoring in all of US economy’s robustness (4.5% to 5%) and therefore from a risk reward perspective the likelihood of a disappointment is far more.
USDINR 1m NDF is trading 2p left now which indicates offshore selling pressure. CNH has strengthened since yesterday morning although in the last couple of hours it has slipped from 6.74 to 6.77. EM currencies have generally strengthened along with overnight dollar weakness and all time high on equities. We are nearing the month end now and general participant action suggests that between today and tomorrow we should see a lot of USDINR longs (who had earlier expected 70+ levels this month) exit their position, which should result in the pair coming lower. Broad range remains 68.30-69.10. For the day CMP 68.63, Range 68.71-68.45.
No comments:
Post a Comment