On Monday , we are expecting USDINR start trading with gap down as dollar inched down, on morning in Asia, giving up some earlier gains, with investors still digesting U.S. Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole symposium the previous Thursday.
Monday is a crucial day for the Indian economy. The National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) will come out with the GDP estimates for the first quarter (April, May, June) of the current financial year.
FPIs have bought Rs 46,602 crore worth of shares so far in August, the highest monthly inflow in calendar year 2020. FPIs are making use of the interest rate differential to bring in dollars. Globally, risk sentiments have strengthened on aggressive stimulus by the US Fed and there have been sharp inflows into the stock market.
RBI buys dollars, it releases equivalent amount in the rupees into the system which, in turn, could put pressure on inflation and yields , so we are not recently witnessing any intervention from RBI.
INTRADAY RANGE - 72.33 ( 72.94 - 73.56 ) 74.18
GLOBAL HIGHLIGHTS
A speech last Thursday in which Federal Reserve Chair Jerome Powell outlined an accommodative shift in the central bank's approach to inflation has weighed on the greenback as investors interpreted it as meaning rates would stay lower for longer. Month of August, the dollar is down nearly 1.3% against a basket of currencies and about 1% against the euro, having dropped more than 10% against both since March.
The USD/JPY pair edged up 0.17% to 105.52. The yen saw gains after Sunday’s reports that Yoshihide Suga, Abe’s Chief Cabinet Secretary, intended to run for prime minister, after incumbent Shinzo Abe announced on Friday that he would be stepping down from the position due to poor health. If elected, Suga is widely expected to expand the fiscal and monetary stimulus programs rolled out under Abe.
The USD/CNY pair edged down 0.20% to 6.8490. Earlier in the day, China released a manufacturing purchasing managers index (PMI) of 51 and a non-manufacturing PMI of 55.2 for August. Although the manufacturing PMI was slightly lower than the forecasted 51.2 prepared by Investing.com, the figures stayed above the 50-mark indicating expansion.
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