Tag: Forex

Currency Insight

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US CPI Preview: What to expect of EUR/USD?

US inflation figures gauged by the CPI are due later in the session. Market consensus sees headline consumer prices advancing 0.1% on a year to October, while the Core reading – excluding Food and Energy costs – is seen at 1.9% on a yearly basis.

Inflation, or the lack of it, has been a persistent concern amongst FOMC members against the backdrop of a potential Fed’s lift-off, most likely to be announced at the December meeting. Many of the members have already expressed their divided views on the subject, and many have also coincided that current inflation levels remain low.

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
12:30am USD FOMC Meeting Minutes
Tentative JPY Monetary Policy Statement
Tentative JPY BOJ Press Conference
7:00pm USD Unemployment Claims 272K 276K
8:30pm USD Philly Fed Manufacturing Index 0.1 -4.5
11:00pm USD FOMC Member Lockhart Speaks

 

Explanation:-

Quick Glance :
Instrument Price %Chg Volume OI
USD/INR 66.05 0.17 788526 960103
EUR/INR 70.44 -0.82 37048 48836
GBP/INR 100.46 0.07 21059 41217
JPY/INR 53.62 -0.64 7908 15311

 

Currency Insight

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Dollar edges up near 2-1/2-month high ahead of Fed outcome

The dollar edged closer to a 2-1/2-month high against a basket of currencies on Wednesday as traders awaited clues from the Federal Reserve about the timing of a U.S. interest rate increase.

A rate hike at the Fed’s two-day policy meeting which ends later on Wednesday is virtually priced out due to underlying concerns over a slowdown in China and the broader impact on global growth.

But many investors still expect the Fed to indicate that interest rates could rise as early as December. The index, which gauges the greenback against six rival currencies, stood at 96.958 , up about 0.1 percent from late U.S. trade and not far from a 2 1/2-month peak of 97.201 scaled on Friday.

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.

China welcomes IMF backing to make yuan world reserve currency

China on Saturday welcomed backing from IMF experts that the yuan should be included in its reserve currencies, saying the move would strengthen the world’s financial system.

Now the world’s second-largest economy, China asked last year for the yuan to be added to the elite basket of SDR currencies, but until recently it was considered too tightly controlled to qualify.

Important events and their explanation:

 

Time ( IST) Currency Economic Data Actual Expectation
7:00pm USD CPI m/m 0.20% -0.20%
USD Core CPI m/m 0.20% 0.20%
7:45pm USD Capacity Utilization Rate 77.50% 77.50%
USD Industrial Production m/m 0.10% -0.20%
17th-19th USD Mortgage Delinquencies 5.30%

 

Explanation:- Out of these above data US CPI  may decide the medium term trend of the price USD.  Any positive news may be positive for the USD

Quick Glance :

 

Instrument Price %Chg Volume OI
USD/INR 66.00 0.17 788526 960103
EUR/INR 70.86 -0.82 37048 48836
GBP/INR 100.20 0.07 21059 41217
JPY/INR 53.70 -0.64 7908 15311

 

Technical touch :

EURINR

FOREX EURINR_Daily_1Year

As seen pair is trading near its crucial support levels which is at 70.56 levels. Hence we assume any breakout below 70.50 may further weaken the Euro till 70.20 levels and upside strong resistance at 71.40 levels.

 

Morning Business News Round up_August 27, 2015

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Morning Business News :

  • $354-Bn Forex War-Chest Too Small To Fight A Crisis: Kaushik Basu
  • Govt Nods Royalty Payment To States On Oil Production
  • Nyse Invokes Rule 48 For Market Open In Anticipation Of Volatility
  • India Can Tide Over China-Driven Crisis, Says Chanda Kochhar
  • Developers Allowed To Divest 100% Equity In Road Projs
  • Trading In Sterling Holidays To Be Discontinued From Aug 31

  • India, Uae Launch Forum To Evaluate Business Opportunities
  • Govt May Pare Stakes In Some Banks To 33%
  • 3 Stocks Account For 1/3 Of 2,200-Point Sensex Fall In 1 Week
  • Tata Capital To Raise $1 Bn For Second Corpus Across 3 Funds
  • Mmrda Sanctions Rs 35,400 Cr For 118-Km Mumbai Metro Network
  • Iocl’s Ratings Unaffected Despite Stake Sale: Fitch
  • Sun Tv Network Enters Into Deal With Hooq To Share Its Library
  • Credai To Come Up With Their Own Data For Real Estate Sector
  • Pboc Injects 140 Bn Yuan Via Short-Term Liquidity Operations
  • Long Way To Go For India To Become Global Growth Engine: Rajan
  • Pakistan’s Economy Facing Existential Crisis, Says Report
  • China To Restrict Stock Index Futures Trading To Curb Speculation
  • Natural Rubber Prices Skid To 6-Year Low On China-Led Rout
  • Rajat Gupta Files Appeal To Overturn Insider Trading Conviction
  • Raghuram Rajan Says Not In Favour Of Devaluing Rupee: Report
  • Airtel Acquires Augere Wireless In 4g Push
  • L&T Infotech To File Draft Ipo Papers By Early September
  • Analysts Wary As Ashok Leyland Aims To Double Export Revenue
  • Ultratech Cement Said To Be Near Deal For Jaiprakash Plant In Bhilai
  • Ntpc Worried As Sebs’ Payment Security Mechanism Set To Lapse
  • Sensex Falls 318 Points, Nifty Ends Below 7,800
  • Icra Sees Npas Jumping To 5.9% By March From 4.4% In Fy15
  • Commodities Price Crash Could Give Big Push To Infrastructure Projects
  • China Probing Brokers, Regulators For Possible Stock Crimes
  • Cairn To Invest Rs 1,400 Cr To Raise Oil, Gas Carrying Capacity
  • Apollo Tyres Closes 300m Euro Financing For Hungary Plant
  • Mahindra To Invest Rs 700 Cr To Become Full Range Cv Player
  • L&T Bags Rs 864-Cr Order From Qatar’s Kahramaa