Key highlights

Soaring food prices pushed British consumer price inflation to a 40-year high of 9.1% last month, the highest rate out of the Group of Seven countries and one which underlines the severity of the country's cost-of-living crunch. The reading was up from 9.0% in April and matched the consensus of a Reuters poll of economists. The BoE will "act forcefully" to combat rising prices, the British finance minister said.

Some Bank of Japan board members were concerned that excessive currency volatility could disrupt corporate business plans, minutes of the bank's April meeting showed, highlighting the challenge for policymakers from the yen's sharp declines. But many board members stressed the need to maintain the BOJ's massive stimulus programme to support a still-fragile economy, the minutes released showed, a sign they saw no need to tweak Japan's ultra-low interest rates to stem the yen's slide.

The Reserve Bank of India's Monetary Policy Committee members were unanimous in stressing the need to bring inflation within the central bank’s tolerance band, the minutes of the rate-setting panel’s latest meeting released show.

USD/INR movement

The USDINR pair made a gap up opening at 78.12 and traded within the range of 78.12-78.39. The pair recorded an all-time high today to close at the level of 78.385. Persistent FII selling in the domestic market and broad strengthening of the dollar ahead of the Fed chair Powell continue to keep the domestic currency under pressure. The focus will be on Powell's testimony due today for further cues on rates trajectory.


Global currency updates

The USDJPY is taking a breather under a new 24-year high, as overbought conditions prompt some profit-taking after the pair saw levels last seen in 1998. The overall picture shows bulls fully in play, as the dollar remains well supported by strong safe-haven demand, expectations for the Fed to remain hawkish in coming months, and weakness of its major counterpart. The GBPUSD met fresh bearish pressure early today and declined below 1.2200. The risk-averse market environment and inflation data from the UK weighed on the pair mid-week. The EURUSD pair lost its bullish momentum early today and retreated below 1.0500 before recovering modestly. With safe-haven flows returning to markets amid escalating recession fears, however, EURUSD reversed its direction.

Bond market

U.S. Treasury yields were lower as risk-off sentiment returned to global markets. The yield on the benchmark 10-year Treasury note was down at 3.201%. Concerns over a possible recession have weighed on investor sentiment in recent weeks. Indian bond yields edged lower as investors drew comfort from a sharp fall in global crude oil prices, which if sustained will bring down imported inflation and reduce the need for aggressive monetary policy tightening. India's benchmark 10-year bond yield fell by more than 5 bps on the day to 7.396%.

Equity market

Indian equity benchmarks Sensex and Nifty 50 snapped a two-day winning run tracking nervousness across global markets as investors awaited a key testimony by Fed Chair Jerome Powell due later in the day. Financial, media, metal, and IT shares were the biggest contributors to the fall in headline indices. Broader markets mirrored the losses. The Nifty midcap 100 and the Nifty small cap 100 fell around 1.5% each.

Evening sunshine

Focus to be on the US Fed Chair Powell testimony.

European stocks fell sharply, giving up gains made in the previous sessions as global volatility continues. Wall Street futures fell after a broad-based rally in the previous session, with investors focusing squarely on Federal Reserve Chair Jerome Powell's congressional testimony to gauge the pace of future interest rate hikes. Fed Chair Jerome Powell will appear before Congress today, kicking off two days of testimony.

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 Join Telegram

Recommended Content

Recommended Content

Editors’ Picks

EUR/USD extends slide to fresh two-week lows near 1.0400

EUR/USD extends slide to fresh two-week lows near 1.0400

Following a short-lasting recovery attempt in the early European session, EUR/USD has met fresh bearish pressure and declined toward 1.0400. The dollar continues to gather strength amid risk aversion as investors await the PCE inflation data from the US.


GBP/USD stays below 1.2150 ahead of US data

GBP/USD stays below 1.2150 ahead of US data

GBP/USD is having a tough time gaining traction and trades below 1.2150 on Thursday as the dollar holds its ground in the risk-averse market environment. The US Bureau of Economic Analysis' PCE inflation data will be looked upon for fresh impetus.


Gold stays on the back foot, retreats toward $1,810

Gold stays on the back foot, retreats toward $1,810

Gold has lost its traction and declined toward $1,810 following a consolidation phase in the early European session. Although the benchmark 10-year US Treasury bond yield is down more than 1%, the broad-based dollar strength weighs on XAU/USD. 

Gold News

Breaking: Bitcoin price drops below $19,000

Breaking: Bitcoin price drops below $19,000

Bitcoin price has breached a critical area of support over the past few hours, dipping below $19,000. Transaction history shows that a large number of addresses acquired BTC above $20,000. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!