USDINR
On Thursday, We are expecting USDINR to commence session mild gain at 74.40 – 74.50 levels after yesterday sharp correction from 74.71 to 74.41/43 levels as the greenback slid with U.S. Treasury yields retreating as well after hitting roughly two-year peaks on 2-year and 10-year notes, but the greenback remains well-supported as investors prepared for a widely expected interest rate increase in March.
A fuel price freeze by India's oil companies as the global crude market surges could dampen inflationary pressures enough to delay an interest rate hike, and might generate significant electoral gains for Prime Minister Narendra Modi.
Indian fuel retailers revised prices daily through much of last year but, despite the oil market hitting a seven-year high, have held them unchanged since early November as well as cutting gasoline and gasoline taxes.
Indian shares closed at their lowest in more than a week on Wednesday as rising bond yields globally sparked a selloff in technology stocks and non-bank lender Bajaj Finance slumped on valuation concerns.
Stocks in Asia and Europe were also lower as U.S. and European bond yields hit multi-year highs, leaving investors bracing for tighter monetary policy to tame surging inflation.
China stepped up its monetary easing efforts to prop up a slowing economy this week by lowering a set of key policy rates and lending benchmarks, and markets believe Beijing could ease further before growth bottoms out.
Bond yields in other major economies rose as well, with the euro, sterling, and the Canadian, Australian, and New Zealand dollars, among others, gaining versus the U.S. currency.
Day Trend: - BUY ON DIP
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