Today the US GDP data could push EURUSD below 1.10 mark
given the recent build up in downward momentum. Most DM central banks are
turning dovish and a stronger US GDP data can have its maximum impact on EURO.
Saudi Arabia will likely cooperate with the US to ensure that oil supply
concerns does not result in higher oil prices. The US Iran nuclear deal in 2015
was the major reason the two long term allies (US and Iran) developed their
differences, which led Saudi to cooperate with Russia. Now with the US pulling
out of the nuclear deal and reinstating sanction on Iran, there is nothing that
Saudi would like more. Therefore Saudi is likely to pay heed to the US demand
of lower oil prices with sufficient supply. Technically a break of 71.8 calls
for 78 levels which can be due to Iran’s counter measures, but a runaway move
looks unlikely in spite of reduced supply because of the international politics
involved.
USDINR 1m NDF is trading 8p right while CNH has mildly
appreciated since yesterday although KRW continues to exhibit weakness. This
accompanied with dollar strength and higher oil prices does not bode well for
INR. It seems that there are no major inflows in pipeline for USDINR in the
next 2 weeks. 70.18/20 was a major resistance which has been broken yesterday
and today again, which makes it a convincing break. USDINR could head towards
70.88 levels in the next fortnight with downside limited to 69.85. CMP 70.17,
Range 70.10-70.35.
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