The FED had been shifting its stance from overtly hawkish to less hawkish as the US growth seems to be peaking (from its unsustainable 4% levels). Yesterday’s Powell’s comments that current rates are near neutral rates seem to have been influenced by EU growth concerns plus recent crude price fall. The comments have led to a sharp selloff in USD across the board and has helped risk sentiments with the DOW closing 2.5% higher.
INR has been closely tracking TRY, ZAR and IDR in November and since yesterday all 3 of these currencies have appreciated by 1-1.5%. INR 1m NDF is trading just 1.5p left as compared to 5p left yesterday indicating reduced selling pressure in offshore market. Technically USDINR looks headed to 69.40 but with Trump-Xi meet and local state election results we can see some volatility. I would expect Trump-Xi meet to have a positive impact on INR therefore until next week we could see 69.40 on the Rupee. Crude is lower by ~2$ since yesterday on the basis of higher inventory in the US. CMP 70.12, Range 70.20-69.80.
No comments:
Post a Comment