The Domestic unit (Rupee) Likely to commence Tuesday session with mild firm note between 72.43 - 73.50 levels as Oil prices fell more than 1% early morning session , extending losses that began last week, as investors unwound long positions on concern that OPEC may agree to increase global supply in a meeting this week and Chinese demand may be slipping. But on contrary greenback stood firm against its low-yielding peers on bets of a faster economic recovery and greater tolerance of higher U.S. bond yields.
On Last trading session , USDINR opened at 73.77/78 and hit intraday high with opening at 72.78/79 levels. From opening trade pair struck in under pressure as equity market advance, Pair hit intraday lows at 73.1875/73.1975. Second half of the session USDINR getting some boost and able to manage finished at 73.55/56 levels.
INTRADAY RANGE - 72.88 ( 73.20 - 73.82 ) 74.07
GLOBAL
The market has been in a euphoria for some time and everybody says the dollar will weaken on rising risk appetite. But oil prices dipped yesterday and gold also slipped. If commodity markets are waking up to the reality, then we could see some weakness in commodity-linked currencies.
Oil prices remained under pressure as investors were making position adjustments ahead of the OPEC meeting. The group meets on Thursday and could discuss allowing as much as 1.5 million barrels per day (bpd) of crude back into the market. OPEC oil output fell in February as a voluntary cut by Saudi Arabia added to reductions agreed to under the previous OPEC+ pact, a Reuters survey found, ending a run of seven consecutive monthly increases.
As a result, the gap between U.S. and European bond yields has been widening in a boost to the dollar; the 10-year yield differentials between U.S. Treasuries and German Bunds reached 1.76% on Monday, the highest in a year.
EURUSD down -0.19% trading at 1.2024, The European common currency was under pressure as top officials from the ECB sounded alarm over rises in bond yields. President Christine Lagarde said on Monday the ECB will prevent a premature increase in borrowing costs for firms and households.
Policymaker was even more explicit, saying some of the recent rises in bond yields were unwarranted and that the ECB must push back using the flexibility embedded in its bond purchase programme.
The uptick in long-term bond yields so far seems to suggest an adjustment to stronger growth and inflation outlook. Central banks continue to take diverging views on the signals sent by the recent rise in yields. The U.S. Fed is taking it as a positive signal.
Gold looked like it was getting past February’s misery but weakness in gold was not yet over. Gold is not in the clear just yet, but the fundamentals appear to be improving.
Bitcoin also jumped back in tandem with gains in risk assets, trading at $49,129 and pulling away from Sunday's three-week low of $43,021.
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