Global developments

There has been a follow-up move in the Dollar post the FOMC as short USD positions continue to get unwound on fears that the Fed may taper and hike rates sooner than was earlier expected. However, the same follow-through has not been seen in US yields. US 10y yield has come off 5bps to 1.52% and 30y yield too has retreated from 2.20% to 2.10%. US yield curve has flattened and inflation expectations have come off across maturities, which is usually negative for risk assets. However, equities have not reacted too negatively. Given that the typical risk-off correlations are not playing out, it would be premature to call this move in the Dollar a reversal. US jobless claims came in higher than expected and rose for the first time after falling for six consecutive weeks.

Equities

Nifty shed 0.5% in trade yesterday to end at 15691. Breadth was negative with 16 stocks advancing and 34 declining. Tech and cement stocks gained while Autos and Pharma traded weakly. Dow fell 0.6% overnight, while Nasdaq gained 0.8%. 

Bonds

The RBI bought the 2030 security aggressively in GSAP. Out of the Rs 30000crs that RBI could have bought across six securities, the RBI bought Rs 27000crs of 2030 security itself. While the market yield on 2030 security was close to 6.07%, the RBI accepted offers all the way to 5.99%. The yield on the 2030 security finally ended at 6.01%. The RBI, therefore, continues to seek to influence the curve by controlling the benchmark. OIS got paid further with 3y and 5y ending at 4.72% and 5.31%.

USD/INR

The Rupee had opened weak and weakened further through the session. Stops got triggered above 73.85, resulting in a brisk move to 74.10. Even post OTC close, USD/INR got bid up as offshore positioned for further Dollar strength. Considering that recent such moves have been short-lived, we expect volatility dampening to happen quickly. We, therefore, do not see a trending move higher in USD/INR at this point. The trading range may shift to 73.40-74.90 for the medium term.

Strategy: Exporters are advised to cover a part of their near-term exposure between 73.80-74.30. Importers are advised to cover through forwards on dips towards 73.30. The 3M range for USDINR is 72.50 – 75.50 and the 6M range is 73.00 – 76.50.

fxsoriginal

 

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.

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD remains depressed below 1.1850 after the Fed's taper talk

EUR/USD is trading under 1.1850, hit by hawkish comments by the Fed's Clarida and Daly. The bank is nearing tapering its bond-buying scheme, a move that could happen this year. US jobless claims and a speech from the Fed's Waller are eyed.

EUR/USD News

GBP/USD flirts with 1.3900 ahead of the BOE's Super Thursday

GBP/USD is licking its wounds around 1.3900 ahead of the BOE’s Super Thursday rate decision in which it also releases new forecasts. Declining covid cases are supporting sterling while hawkish comments from the Fed's Clarida are boosting the dollar.

GBP/USD News

Gold swings in a familiar range of $1,810 and $1,830

Gold pares all the previous day’s gain and falls back to the familiar trading range. After testing the high of $1,835 in the overnight session, gold prices edge lower on Thursday. The US Treasury yields bounce off their lows following Fed’s official’s hawkish comments.

Gold News

75% of Ethereum nodes prepared for London hard fork as ETH price surges above $2,700

Around 75% of Etheruem nodes are prepared for the London hard fork. The highly anticipated upgrade is expected to occur on block 12,965,000 scheduled for August 5, following a slight delay. Ethereum price managed to slice above $2,700 for the first time since early June. 

Read more

Bank of England Preview: Five reasons the doves are set to win Super Thursday

An epic battle between hawks and doves on Super Thursday? That is a dramatic way to view the Bank of England's upcoming rate decision – yet there are good reasons to expect doves to carry the day. That would send sterling down. 

Read more

Majors

Cryptocurrencies

Signatures