Price action suggests that EURUSD should break lower but it
will continue to test as there is no runaway trends currently. US-China trade
talk chatter indicated towards a positive outcome as White house said that an
MOU could be released before the 1st March deadline. Equities
in the US have had a stellar start to 2019 which is primarily on accord of a
dovish FED and a developing view that the FED might announce a slowdown in
balance sheet unwinding sometime during the current year.
Brent oil prices rose on the back of US-China trade talks
and US sanctions related chatter on Venezuela and Iran. With global growth
slowing and Saudi Arabia out of US favor, Brent should find it difficult to
sustain above 68.3 levels. USDINR 1m NDF is now trading 6p right on the back of
increased geo-political risk between India-Pakistan and Brent oil prices gains.
Overnight EM currencies had strengthened but the same did not reflect on INR
given gains in crude prices. With India bond yields rising higher, the optimism
of further rate cuts seems to totally digested. USDINR should find it difficult
to sustain below 71.20 now with a possibility of 71.85 this week. CMP 71.45,
Range 71.35-71.60.
No comments:
Post a Comment