With no retaliation from China, the duty imposed by Trump on
Chinese import has become blunt in terms of market impact, as participants seem
convinced that the move was more of a negotiating tactic rather than a policy
step. The Chinese have shown tenacity and have refused to get provoked which
has continued to help risk sentiments. EU data has shown mild resilience which
has prevented the Euro from convincingly breaking 1.1150 levels, but I guess it
is a matter of time before a down trend starts in EURUSD.
USDINR 1m NDF is trading 5.5p right as compared to 6-7p
yesterday morning. Equities in Asia are flat to mildly positive while EM
currencies have also registered moderate gains since yesterday evening. Oil
price seems to have been controlled by OPEC under the US demands post the Iran
sanctions. Price action in USDINR everyday suggests some chunky inflows going
through. Anecdotal evidence suggests a continued eagerness to complete capital
account transactions before India election results. CMP 69.35, Range
69.35-69.20. Medium term it looks like USDINR would break towards 68.30 levels
again in view of the capital account inflows and abating risks to Rupee (like
oil and trade war).
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