USDINR
On Thursday, USDINR most likely to commence session with firm note between 78.95 – 79.05 levels as dollar rose on Wednesday after U.S. Federal Reserve Chairman Jerome Powell said the biggest risk to the U.S. economy is persistent inflation and not that interest rate hikes will slow the economy too much.
On Wednesday, USDINR finished at all-time higher levels at 78.97/98.
India's central bank may need to change the way it seeks to slow the rupee's decline, analysts and traders say, with its current method of intervention in the forwards market now only accelerating the currency's fall.
The rupee has hit a series of record lows this week and is within striking distance of the psychologically important 79-to-a-dollar level, as concerns around growth, portfolio outflows, high global crude prices and sustained inflation weigh.
THE EUROPE
European Central Bank Forum in Sintra, Portugal, Powell noted that engineering policy tightening to avoid a U.S. recession is certainly possible but not guaranteed.
The euro was last down 0.76% at $1.0436. The ECB is widely expected to raise interest rates in July for the first time in a decade, following its global peers, to cool accelerating inflation. Economists are divided on the magnitude of any hike, giving investors pause.
THE SWISS
The Swiss franc jumped at 1.0034 against euro, the highest level against the single currency since 2015. It was last up 0.965% at 1.0025.
Cash held overnight by the Swiss National Bank fell last week by its largest amount in more than a decade, in a sign of the end of the central bank's forex purchase campaign to weaken the Swiss franc.
THE US YIELDS
Treasury yields slipped as inflation worries hounded investors. The yield on 10-year Treasury notes fell 12.5 basis points to 3.082%, while the two-year's yield slid 7.5 basis points to 3.049%.
THE OIL
Oil prices fell, with an increase in U.S. gasoline and distillate inventories and worries over slower global economic growth overshadowing supply concerns.
USDINR TECHNICAL
Day Trend: - BUY ON DIP (Short Term)
Weekly Trend: - HOLD
INTRADAY RANGE – 79.18 (79.05 – 78.92) 78.79
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