US weekly jobless claims came in at 744k, higher than expectations of 680k. Elevated jobless claims have pushed back the market's expectations of the Fed's tapering and lift off. US yields have cooled off across the curve, and that is reflected in USD weakness particularly against Euro and JPY.

The Rupee which was quite steady through most parts of the session yesterday got spooked on break past 74.50 as stops got triggered. A global outage in Reuters interbank dealing system led to an exaggerated move as banks scampered to take stops in exchange-traded futures. April futures traded a high of 75.13. and were 5-7p above corresponding OTC levels.  While the bonds and equities rejoiced RBI's move of capping long term yields, the Rupee had to bear the brunt as the move would reduce the carry. FPIs who had been receiving carry in offshore unwound their positions causing the Rupee to weaken. Stop losses also got triggered along the way causing the spike to become even more vicious.

The forwards have come off significantly with 1y forward yield now at 4.60%. The fall in carry has reduced the cost of going short Rupee against the Dollar and has triggered an unwinding of carry positions in offshore and has also triggered stop losses onshore. 

The RBI announced the details of securities it would purchase through G-SAP. The purchases are spread across the curve. Domestic bonds continued the post-policy rally with the yield on the 10y benchmark ending at 6.03%. The RBI also announced the 14 day variable reverse rate repo for Rs 200000crs which it had not rolled over the last time to help markets tide over year-end liquidity stress. Details of long tenor VRRRs are awaited. Focus today will be on the Rs 32000cr Gsec auction.

Strategy: Exporters are advised to cover a part of their near-term exposure on upticks towards 74.80. Importers are advised to cover through forwards on dips towards 73.50. The 3M range for USDINR is 72.50 – 75.00 and the 6M range is 73.00–76.00.




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 slips below 1.2050 amid dollar strength

EUR/USD is trading below 1.2050, losing some of its gains as the dollar shrugs off the fresh drop in yields and rises. European regulators said the benefits of J&J's vaccine outweigh the risks.


GBP/USD retreats from 1.40 despite upbeat UK job figures

GBP/USD is extending its falls after retreating from 1.40 as the dollar edges higher. Earlier, the UK reported a drop in the unemployment rate to 4.9%, better than expected. The Claimant Count Change also beat estimates with 10.1K. 


XAU/USD tests key Fibo resistance at $1,775

XAU/USD rebounds after closing in the negative territory on Monday. 10-year US Treasury bond yield is edging lower on Tuesday. Additional gains are likely if gold manages to clear $1,775 resistance.

Gold News

Ethereum price on cusp of massive breakout if key level holds

Ethereum price had a significant 23% correction in the past week but holds above a key support level on the 12-hour chart. The digital asset still has robust on-chain metrics supporting it and aims for a rebound.

Read more

S&P 500 (SPX) Update: Equity markets take a well deserved breather, crypto stocks slide

Equity markets took a much-needed break from setting record highs on Monday. Tesla suffered a steep 5% fall after reports of a crash with no one at the wheel. Have a Coke and a smile was up 1% as KO smashed earnings estimates.

Read more