USDINR
Its New Normal, On Friday USDINR is most likely to commence between 79.90 – 80.00 levels as the dollar resumed its relentless rise, driven by both expectations for faster policy tightening by the Federal Reserve and safe-haven flows as fears grow for a recession.
On Thursday, The Indian rupee weakened to hit record lows against the greenback for a fourth straight session after data showed U.S. inflation, already at four-decade highs, accelerated even further.
The partially convertible rupee was ended Thursday session at 79.88/89 after hitting all-time lows at 79.92/93 levels against greenback.
Traders expect dollar selling intervention by the central bank to slow the slide in the rupee but expect it to touch levels of 80 to the dollar in the near future.
THE DOLLAR
Fed funds futures now indicate a 31% chance of a 100 basis points increase, down from around 70% earlier, and a 69% chance of a 75 basis points increase.
Federal Reserve officials indicated they favoured a 75 basis points hike at the U.S. central bank's July meeting, reducing the odds of a more aggressive move.
Odds of a 100 basis points move fell, however, after Fed Governor Christopher Waller said he supported another 75-basis-point interest rate increase at the central bank's policy meeting later this month, but would lean toward a larger hike if new data shows demand is not slowing fast enough to reduce inflation.
THE EURO
On Thursday, Trading was volatile with the euro hitting 20-year lows after a party in Italian Prime Minister Mario Draghi's coalition government failed to support a parliamentary confidence vote including measures to offset the cost of living crisis. Draghi later resigned.
THE YEN
The dollar also jumped to a 24-year high against the yen as the Japanese central bank maintains a dovish stance that contrasts with hawkish moves by other central banks.
USDINR TECHNICAL
Day Trend: - BUY ON DIP (Short Term)
Weekly Trend: - HOLD
INTRADAY RANGE – 80.26 (80.05 – 79.84) 79.63
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