The great things about our time is that we (most of us at least) don’t have to hide in bomb shelters when two powers fight. If this is a currency (depreciation) war then China cannot keep on winning, it is a matter of time before the US talks down the dollar. One way moves in most of the currency pairs would be difficult as the rhetoric battles swing sentiments like a pendulum. This should go on till November midterm elections in the US post which there will be a North Korea like resolution, i.e., without any conclusion.
Today EU retail sales would be a good indicator of EU economic activity pick up (or lack of it) in the current summer. Markets will also look at NFP and US services ISM wherein a weaker data might be of larger impact than otherwise, but the focus remains on news headlines.
USDINR 1m NDF is trading 3p left now while KRW has depreciated along with CNH since yesterday evening. Dollar strength should continue to push USDINR higher. Indian equities are in the green while oil levels are 140 cents higher than yesterday. Medium term USDINR range should continue to be 69.10-68.30. For the day, CMP 68.71, Range 68.65-68.85.
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