Rupee trades higher against US dollar
Rising for the second straight day, the rupee gained 9 paise to 66.09 against the US dollar in early trade on Friday, as the greenback fell in overseas markets on hopes that the post the liftoff, any rate hike by the US Federal Reserve would only be gradual.
The domestic currency had closed 12 paise higher at 66.18 on Thursday on fresh dollar selling by banks and exporters.
Europe’s Quiet Currency War Besets Nations Losing Inflation Grip
From Stockholm, where the Riksbank will publish the minutes of its latest policy meeting on Tuesday, to Prague, Copenhagen and Zurich, officials in countries circling the currency bloc are waiting for the European Central Bank president to say next month whether he’ll expand stimulus. Only then will it be clear whether they’ll need to retaliate with more asset purchases, rate cuts and currency interventions of their own to dig in against imported disinflation.
Draghi’s bonanza of cheap cash is depressing financial returns in the euro area and driving investment flows into neighboring countries, pushing up their currencies and defeating their efforts to hit their own inflation targets. Looser monetary policy is in the cards even in countries where economic growth is strong and asset markets are overheating.
USD/JPY stabilized around 123.20
The greenback has surrendered some its initial gains vs. its Japanese counterpart on Tuesday, taking USD/JPY to the 123.25/20 band, or session lows.
Spot continues to recover from last week’s decline, managing to rebound from recent lows in the 122.30/20 band and trading at shouting distance from 3-month tops around 123.50.
Ahead in the session, USD will be in the limelight as US inflation figures measured by the CPI are due. Consensus expects consumer prices to have gained 0.1% on a year to October, while Core prices are expected at 1.9% YoY.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Actual | Expectation | Previous |
| 3:15am | USD | FOMC Member Fischer Speaks | |||
| 3:00pm | GBP | Public Sector Net Borrowing | 7.5B | 5.5B | 8.3B |
| 9:45pm | USD | FOMC Member Dudley Speaks |
| Quick Glance : |
| Instrument | Price | %Chg | Volume | OI |
| USD/INR | 66.19 | 0.17 | 788526 | 960103 |
| EUR/INR | 70.72 | -0.82 | 37048 | 48836 |
| GBP/INR | 101.26 | 0.07 | 21059 | 41217 |
| JPY/INR | 53.90 | -0.64 | 7908 | 15311 |
| Technical touch : |
USDINR
On the Currency part, USDINR is trading just under its crucial resistance of 66.46 levels, which is also the Neckline of an inverted Head and Shoulder Pattern. Any closing above this may be brutal for the INR and for the Indian equities market. US rate hike news continuously dampens the INR, because foreign funds are moving out into the US bonds. On the other side Modi’ government is trying hard to attract the foreign funds and at some levels they succeeded too. Indian inflation is falling since last 7 months because of the Global Commodities price, also one of the positive factors for the Indian rupee. Hence overall, USDINR pair might remain in a tight range between 66.50-65.80 for the next 14 days.
