USD/INR to advance nicely towards $75.00 by end-2021 – CE

FXStreet Team FXStreet

Analysts at Capital Economics expect the Indian rupee to depreciate against the US dollar in the coming months as the US Treasury yields are set to continue rising.

Key quotes

“With US Treasury yields now looking set to rise further over the coming couple of years, we expect the US dollar to appreciate further against most DM and EM currencies.”

“We are now forecasting the rupee to depreciate from 72.6/$ currently to 74/$ and 75/$ by the end of 2021 and 2022 respectively. Our previous forecasts implied a slight appreciation in the rupee over the next two years.”

“There should be limited economic fallout from a weaker rupee. The pass-through to inflation is small by EM standards. In addition, India has a very low burden of foreign currency debt. So at least the existing strains in the banking sector won’t be exacerbated by currency weakness.”

Author

FXStreet Team

FXStreet

EUR/USD challenges 1.1800, two-week lows

EUR/USD remains on the defensive, extending its leg lower to the vicinity of the 1.1800 region, or two-week lows, on Tuesday. The move lower comes as the US Dollar gathers further traction ahead of key US data releases, inclusing the FOMC Minutes, on Wednesday.

GBP/USD looks weaker near 1.3500

GBP/USD adds to Monday’s pessimism and puts the 1.3500 support to the test on Tuesday. Cable’s marked pullback comes in response to extra gains in the Greenback while disappointing UK jobs data also collaborate with the offered bias around the British Pound.

Gold loses further momentum, approaches $4,800

Gold recedes to fresh two-week troughs around the $4,800 region per troy ounce on Tuesday. The precious metal builds on Monday’s downtick following a marked rebound in the US Dollar and mixed US Treasury yields across the board.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.