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THURSDAY FX OUTLOOKS:- RUPEE BREAK RESISTANCE, YIELDS UP, UK INFLATION UP!!

USDINR

On Thursday, USDINR likely to commence between 82.25-82.35 levels as dollar strengthened, lifted by rising Treasury yields, though the pound gained against the greenback after British inflation stayed above 10% in March and put more pressure on the Bank of England to keep raising rates.

  • India's population to overtake China, with 2.9 mln more people by mid-2023, UN estimates

  • India's Adani Ports to consider buyback of debt securities

  • Apple CEO meets India PM Modi, commits to growth and investment

  • Indian shares drift lower in wake of weak IT earnings

  • Gold slides as yields climb, doubts grow about Fed's rate-hike pause

USDINR TECHNICAL

Day Trend: - BUY ON DIP

Weekly Trend: - BUY

INTRADAY RANGE – 82.54 (82.36 – 82.17) 81.99


THE USA BOND YIELDS

The yield on two-year Treasury notes, which are sensitive to expectations for the U.S. central bank's monetary policy, rose 7 basis points to 4.268% after hitting a one-month high of 4.285%.

Futures pricing show an 85.7% chance the Fed will hike rates 25 basis points when policymakers conclude a two-day meeting on May 3.


THE BRITAIN

British consumer price inflation eased less than expected in March to 10.1% from February's 10.4%, meaning Britain has Western Europe's highest rate of consumer inflation.

  • It seems UK's 10%+ CPI reading was the culprit. This has revived worries that interest rates will remain high for longer in the UK – and Europe.

  • Deutsche Bank revised up expectations for British rates to include two more 25 bps rate hikes from the Bank of England. Morgan Stanley now predict one, with a risk of a second.


THE OIL PRICE

On Thursday, Oil prices fell as muted U.S. economic data and expectations of interest rate hikes pushed up the U.S. dollar, prompting fear of a stronger dollar hurting global oil demand by making it more expensive.

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