Published on 14/08/2019 10:53:35 AM | Source: HDFC Securities Ltd

Asian Currencies Gain as US China Tariff Delay - HDFC Securities

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Asian Currencies Gain as US China Tariff Delay HDFC Securities

* Rupee likely to follow Chinese path of appreciation after US delayed tariff on Chinese goods. Earlier on Tuesday, rupee touched six month low of 71.39 a dollar on global turmoil and foreign fund outflows.

* Rupee started today at 70.93 a dollar from previous close of 71.40 a dollar. Rupee expected to consolidate in today’s session ahead of Independence day holiday tomorrow.

* Foreign portfolio investors (FPIs) have pulled out close to $1.5 billion from Indian equity markets as on August 9, while they invested close to $165 million into Indian debt instruments.

* India CPI rose 3.15% in July y/y, lower than 3.18% in June, printing came below RBI’s medium-term target is 4% for the 12 month in row.

* Yen poised for its biggest daily drop against the dollar in more than a year after the Trump administration said it will delay the 10% tariff on some Chinese products until mid-December.

* EURUSD stays on the downside after retreating from a high of 1.1228 seen overnight. Currently it is trading at levels around the 20-period moving average, which is below the 50-period one. Unless the key resistance at 1.1195 is surpassed, the pair is expected to fall toward 1.1160.

* GBPUSD retreated after failing to challenge the key resistance level at 1.2100. Currently, the prices are capped by both declining 20-period and 50-period moving averages. The relative strength index is below its neutrality level at 50, showing the lack of upward momentum for the prices. In this case, as long as 1.2075 holds on the upside, expect a return to 1.2040 before dropping to 1.2015 in extension.


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