Rupee likely to commence Monday session with firm note between 72.40/47 levels despite greenback up on early morning in Asia, but the Turkish lira tumbled towards a record low after President Erdoğan replaced hawkish central bank governor Naci Agbal over the weekend.
USDINR TREND : - DOWN
USDINR INTRADAY CALL : - BUY ON DIP
INTRADAY RANGE - 72.22 ( 72.38 - 72.55 ) 72.65
Asian Indices turned mixed and bonds bounced as a plunge in the Turkish lira sparked talk that capital controls might be needed to stem the rout, though the wider fallout was relatively restrained for the moment.
USA 10-year Treasury notes edged down five basis points to 1.68%.
The Turkish lira stood at 8.1005 per dollar in early Asia trade, down 10.95% from its close on Friday. The lira fell by as much as 14.91% to 8.4850 at one point, close to a record low of 8.5803. Liquidity was thin during early trading in Asia, but some investors were bracing for bigger moves as European and U.S. markets open later in the day.
Erdogan fired Agbal in a surprise move that came two days after a sharp rate hike aimed at heading off nearly 16% inflation and support the lira. With Sahap Kavcioglu now at the helm, the central bank will likely reverse the hawkish steps taken to battle inflation so far, which could lead to prolonged market volatility.
The yen climbed against the euro, the AUD, and the NZD, with the safe-haven asset boosted by expectations that Japanese investors will cut their losses on the lira, which they had bought due to its high rates, and unwind other popular cross yen trades.
Oil prices fell anew, having shed almost 7% last week as concerns about global demand prompted speculators to take profits on long positions after a long bull run.
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