Markets seem to be disregarding the simmering US-China tensions. Some advisors in the Trump administration are in favor of stifling Hong Kong's access to US Dollars in retaliation to China imposing the national security law. HSBC stock has taken a beating as a large part of its income comes from Hong Kong. While at the moment the lower end of the 7.75-7.85 peg of USDHKD is under threat, if the Trump administration does go ahead with restricting USDHKD Convertibility, the Hong Kong Monetary Authority would have to defend the upper end of the peg. 

Nationalized banks have been absorbing Inflows and paying forwards to sterlilize liquidity. This has resulted in the forward curve getting dislocated. While a 3m T-bill fetches 3.17%, doing a B-S swap and parking USD outside would yield 3.75%. Aggressive intervention by nationalized banks has skewed sentiment in the Rupee. It is sending a clear signal that the central bank is not comfortable with a strong Rupee. So far it has put to rest any doubt market participants would have had about aggressiveness of intervention post its balance sheet date. 74.50 is a strong support and we can see a move like we saw on break of 75.40 if it gets tested again. USDINR is likely to trade 74.75-75.10 range intraday. Yuan has strengthened past the 7 mark again. Shanghai composite has gained for 8 straight sessions now 

Globally, the USD has weakened overnight. Gold took out stops above 1800 to print a 9 year high. US weekly jobless claims data is due today. 

Strategy: Exporters are advised to cover between 75.00 - 75.40 through forwards. At lower levels only cover through option strategy. Break below 74.50 may possibly take rupee to 73.80. Importers are advised to hold maintaining a stop loss of 75.50 or cover through risk reversal option strategy. The 3M range for USDINR is 73.60 - 76.50 and the 6M range is 73.00 – 77.00.

Chart

Download The Full Daily Currency Insight

This report has been prepared by IFA Global. IFA Global shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. IFA Global nor any of directors, employees, agents or representatives shall be held liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. No liability whatsoever is accepted for any loss arising (whether direct or consequential) from any use of the information contained in this report. This statement, prepared specifically at the addressee(s) request is for information contained in this statement. All market prices, service taxes and other levies are subject to change without notice. Also the value, income, appreciation, returns, yield of any of the securities or any other financial instruments mentioned in this statement are based on current market conditions and as per the last details available with us and subject to change. The levels and bases of, and reliefs from, taxation can change. The securities / units / other instruments mentioned in this report may or may not be live at the time of statement generation. Please note, however, that some data has been derived from sources that we believe to be reliable but is not guaranteed. Please review this information for accuracy as IFA Global cannot be responsible for omitted or misstated data. IFA Global is not liable for any delay in the receipt of this statement. This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IFA Global to any registration or licensing requirements within such jurisdiction. The information given in this report is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. IFA Global reserves the right to make modifications and alterations to this statement as may be required from time to time. However, IFA Global is under no obligation to update or keep the information current. Nevertheless, IFA Global is committed to providing independent and transparent information to its client and would be happy to provide any information in response to specific client queries. Neither IFA Global nor any of its directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. The information provided in these report remains, unless otherwise stated, the copyright of IFA Global. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright IFA Global and may not be used in any form or for any purpose whatsoever by any party without the express written permission of the copyright holders.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD extends gains above 1.0700, focus on key US data

EUR/USD extends gains above 1.0700, focus on key US data

EUR/USD meets fresh demand and rises toward  1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data. 

EUR/USD News

USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data

USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data

USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday. 

USD/JPY News

Gold closes below key $2,318 support, US GDP holds the key

Gold closes below key $2,318 support, US GDP holds the key

Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.

Gold News

Injective price weakness persists despite over 5.9 million INJ tokens burned

Injective price weakness persists despite over 5.9 million INJ tokens burned

Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price. 

Read more

US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4

US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4

The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing. 

Read more

Majors

Cryptocurrencies

Signatures