USDINR
On Thursday , We are very much optimistic on Rupee will commence session with firm note between 81.90 - 82.00 level against greenback as dollar sank more than 1% against a basket of peers on Wednesday as weakening economic data firmed views that the Federal Reserve will slow the pace of its rate hiking cycle.
The spread between Indian government bond yields and their corporate counterparts is expected to widen in the second half of this year, as tight liquidity and increased borrowings will push investors to demand higher returns.
India's banking system liquidity deficit has jumped to 42-month high levels, and traders do not expect conditions to improve sharply over the rest of the year, meaning investors will start to look for higher yields.
USDINR TECHNICAL
Day Trend: - BUY ON DIP
Weekly Trend: - UPSIDE SELL
INTRADAY RANGE – 82.59 (82.38 – 81.96) 81.34
THE USA DATA AND FED EXPECTED MOVE
The Fed is widely expected to authorize another 75 basis point increase next Wednesday, but the view is growing that any further hikes will be of a smaller magnitude.
The most recent economic U.S. data showed that U.S. home prices sank in August as surging mortgage rates sapped demand.
PMI release indicating that U.S. business activity contracted for a fourth straight month, the signs are building that the aggressive rate hikes by the Federal Reserve are already having a damaging impact on the world's biggest economy.
THE US GOVT YIELDS
The dollar's decline came as the benchmark 10-year U.S. Treasury yield continued its descent from last week's multi-year high of 4.338%, and was last down four basis points at 4.0317%.
THE STERLING
Sterling also hit its highest since Sept. 13, surging 1.325% to $1.1624, extending the previous day's 1.6% gain when markets took succour from Rishi Sunak becoming Britain's prime minister.
THE CANADA
The Bank of Canada hiked interest rates by a smaller-than-expected 50 basis points and said future increases would be influenced by its assessment of how tighter policy was working to slow demand and ease inflation.
KEEP CALM AND CARRY ON!!
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