USDINR
On Thursday, The Domestic Unit (Rupee) likely to start session within range between 72.70-72.80 levels as Domestic equity market rally despite greenback found support from emerging views the Federal Reserve is slowly but surely edging towards a discussion about tightening monetary policy, and as traders await crucial U.S. inflation data this week.
Day Trend: - BEARISH BUT IN OVERSOLD TERRITORY.
INTRADAY RANGE – 72.56 (72.70 – 72.89) 73.05
NZDUSD
Greenback also clipped the wings of the kiwi and it bought $0.7275 after hints of a 2022 rate hike by the Reserve Bank of New Zealand pushed it as high as $0.7316.
The kiwi has given the most recent sign of life, and flight, by jumping 0.15% on Thursday after the central bank reinstated its rates outlook and projected rates rising from 0.25% currently to 0.49% by September 2022 and to 1.78% by June 2024.
USDJPY
The US Dollar and Japanese Yen may be the preferred choice for volatility-shocked investors who at the time may be prioritizing liquidity over returns. Recent bouts of extreme market turbulence - like in 2008 and 2020 – have seen JPY and USD rise against a basket of G10 and EM FX counterparts.
T- BOND
U.S. yields rose overnight, with the benchmark 10-year Treasury yield up 1.7 basis points to 1.5808%.
OIL
Oil was down in early Asia session, even as a bigger-than-expected draw in U.S. crude oil supplies gave the black liquid a boost.
Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration showed a draw of 1.662 million barrels for the week to May 21. Forecasts prepared by Investing.com had predicted a 1.05-million-barrel draw, while a 426,000-barrel draw was recorded during the previous week.
Meanwhile, on-going COVID-19 outbreaks in several countries, including the world’s third-largest oil importer India, are putting a damper on the fuel demand outlook. Australia’s second-most populous state of Victoria will enter a one-week lockdown, starting later in the day, due to its latest outbreak.
ASIAN EQUITY MARKET
Asian shares retreated from two-week highs on Thursday and China started on the back-foot on fears central banks were closer to considering winding back their emergency stimulus while the dollar held at a one-week top.
Overnight, the Fed Vice Chair for supervision, Randal Quarles, suggested that at some stage it will become important for the Fed to discuss plans to tighten its asset purchase programme.
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