USDINR
Welcome to fresh week, USDINR is very much likely to commence Monday session between 81.70/81.80 levels as dollar gave back after jobs gains and wage growth for April beat economists’ forecasts but showed downward jobs revisions for March.
India considering allowing foreign investment in nuclear power
Coal India's Q4 profit falls 17% on higher provisions for wage hike
MSCI to lower free float of two Adani companies
Apple stakes future growth on emerging markets, starting with India
USDINR TECHNICAL
Day Trend: - HOLD
Weekly Trend: - HOLD
INTRADAY RANGE – 82.02 (81.84 – 81.66) 81.48
THE DOLLAR GAME
The dollar has fallen from a 20-year high last September as investors adjust for the likelihood that the Federal Reserve is at or near the end of its tightening cycle, while peers including the European Central Bank have gotten more hawkish.
Investors are pricing in the likelihood that the Fed will cut rates in the second half of this year. However, while the economy is slowing, there are still pockets of strength, which is making investors hesitant to get too much more bearish on the U.S. currency for now.
Fed funds futures traders are pricing in around 75 basis points of cuts by year-end. The Fed raised rates by 25 basis points to 5% to 5.25% on Wednesday and dropped from its policy statement language saying that it "anticipates" further rate increases would be needed.
ASIAN FX – PREVIOUS PAST WEEK PERFORMANCE
The rate-sensitive South Korean won was the best performer for the day, rising 0.5% in an extension of sharp gains from the prior session. The won was also set to close the week nearly 1.6% higher, amid easing pressure from the dollar and Treasury yields.
The Japanese yen rose 0.2% in holiday-thinned trade, and was set to close the week about 1.7% higher as it benefited from increased safe haven demand. Fears of a U.S. banking crisis, coupled with a warning from the Fed on a potential recession this year, saw safe havens such as yen and gold benefit this week.
The Chinese yuan lagged its peers, treading water as softer-than-expected service sector activity data drummed up concerns that a post-COVID economic rebound in the country was slowing down.
The Australian dollar added 0.6% as a report from the Reserve Bank reiterated that interest rates could still rise further, after the bank surprised markets with a rate hike earlier this week.
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