Dollar dips after rally but renewed risk appetite curbs fall
The dollar edged down from a 2-1/2-month high versus a basket of major currencies on Monday, although an increase in risk appetite in the wake of a new round of monetary easing from China limited the greenback’s losses.
Global stock markets rallied after China on Friday cut rates for the fifth time this year, just a day after the European Central Bank signalled that it was ready to increase the scale of its stimulus measures.
The benchmark 10-year U.S. Treasury note yield rose nearly 6 basis points on Friday to a 2-week high as demand for safe havens waned, providing broad support for the dollar, whose index hit 97.201, the strongest since Aug. 12.
Euro hits two-month low vs dollar as ECB weighs
The euro on Friday continued its downward trend against the dollar following European Central Bank chief Mario Draghi’s comments a day earlier that signaled further monetary easing could be on dec for the euro zone.
Europe’s common currency checked in below $1.10, hitting a low against the dollar not seen since early August, and was down 3.05 percent versus the greenback for the week. It was the euro’s worst weekly fall since May.
Pound falls to 2-week lows vs. stronger dollar
The pound fell to two-week lows against the U.S. dollar on Tuesday, as expectations for a U.S. rate hike in the coming months continued to lend broad support to the greenback.
GBP/USD hit 1.5385 during European morning trade, the pair’s lowest since May 8; the pair subsequently consolidated at 1.5415, sliding 0.36%. Cable was likely to find support at 1.5241, the low of May 8 and resistance at 1.5591, the high of May 20. The dollar was boosted after Federal Reserve Chair Janet Yellen reiterated Friday that the bank still expects to start raising interest rates later in the year if the economy continues to improve as expected.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Actual | Expectation | Previous |
| 2:30pm | EUR | M3 Money Supply y/y | 5.00% | 4.80% | |
| 3:00pm | GBP | Prelim GDP q/q | 0.60% | 0.70% | |
| 6:00pm | USD | Core Durable Goods Orders m/m | 0.00% | -0.20% | |
| USD | Durable Goods Orders m/m | -1.10% | -2.30% | ||
| 7:30pm | USD | CB Consumer Confidence | 102.5 | 103 |
Explanation :- Out of the above mentioned data Consumer confidence is the most important data which may impact the USD mostly. We assume data might come negative which would be negative for USD.
| Quick Glance : |
| Instrument | Price | %Chg | Volume | OI |
| USD/INR | 64.92 | 0.17 | 788526 | 960103 |
| EUR/INR | 71.52 | -0.82 | 37048 | 48836 |
| GBP/INR | 99.51 | 0.07 | 21059 | 41217 |
| JPY/INR | 53.64 | -0.64 | 7908 | 15311 |
| Technical touch : |
USDINR
Pair touched its crucial trendline support and formed an Hammer at daily pattern. We assume a bounce till 65.24 levels with a strong support at 64.70 levels.
