On Friday , USDINR likely to start with in range bound with weaker note as greenback maintain falling move on early Asia, with the U.S. struggling to curb its surging number of COVID-19 cases. Combined with the looming expiry of some stimulus measures at the end of July as well as a record number of unemployment claims, investors are casting doubt over the U.S.’ recovery prospects. On Thursday , USDINR was on buying move , intraday trading range was 74.6075 - 74.8875 levels , before settled at 74.76/77 levels.
The decline in hedging expenses stems in part from a recent rebound in the rupee, which has gained 1% in July. That makes it one of the best performing Asian currencies for the month and has helped it pare losses to 4.5% so far in 2020.
MIFOR 6 month swap rates, a combination of the LIBOR and dollar-rupee forward used by India’s borrowers to hedge exchange rate risks, are near a 9 year low. The cheaper hedging costs will give an additional impetus to companies and the nation’s biggest lender State Bank of India, seeking to issue dollar notes.
Borrowers may benefit from cheaper access to the dollar bond market, as they must repay a record $4.6 billion of foreign-currency notes next quarter.
INTRADAY RANGE - 74.48 ( 74.61 - 74.95 ) 75.15
GLOBAL HIGHLIGHTS
The Chinese yuan, a barometer of Sino-U.S. relations, fell overnight after the South China Morning Post reported that the U.S. consulate in Chengdu may be shuttered.
The USDCNY pair was up 0.12% to 7.0150. U.S-China tensions continue to simmer, with China vowing retaliation for the U.S. order for its Houston consulate to close by Friday. But a flight carrying an unspecified number of U.S. diplomats to Shanghai departed on Wednesday evening.
YEN advanced to a one-month high on Friday as deteriorating Sino-U.S. relations heightened investor anxiety, while a surging euro put the beleaguered dollar on track for its worst week in a month.
AUD drifted higher to $0.7114, and is up about 1.7% for the week, but roughly 1% below a 15-month high touched on Wednesday.
The safe-haven Swiss franc also hit a four-month peak of 0.9243 per dollar. Weaker-than-expected U.S. employment data had rattled U.S. markets overnight.
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