Considering that less than a week remains for the trade deal deadline the chances of a phase 1 deal being struck before 15th Dec 2019 appears to be less bright as compared to last week. The political compulsion for Trump to push for a deal also seems to have abated with his approval ratings not declining any more plus equity markets holding on to their gains. Until November 2020 elections Trump gains not as much by doing the trade deal but rather by keeping hopes alive of a deal and simultaneously keeping his constituents involved in the match between the two super powers. This makes me think that Trump will make the contest more difficult before he wins it sometime before the elections which are still 11 months away.
Dollar index failed to continue its downward trend and closed just higher than its 200 DMA (97.67). Asian currencies trade weaker against the dollar as mild risk off plus dollar strength weighs on the currencies. USDCNY fix has moved higher from Friday’s 7.0383 to 7.0405. This lack of global support makes me believe that the lower break in USDINR today morning is not sustainable and is flow driven. The pair should be bought here for a move back towards 71.40. Range for the week 70.95-71.45. CMP 71.12, Range for the day 71.04-71.30
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