Published on 10/07/2017 9:46:32 AM | Source: Sharekhan

Dollar advances on upbeat job data - Sharekhan

Posted in Currency Report | #Currency Tips #Sharekhan


US Dollar Index (DX):

US Dollar increased by 0.22 percent on Friday’s trading session against basket of six major currencies on the back of upbeat job data from US. Job report showed that more than expected jobs were created. As per US Non-Farm payrolls data 222K more jobs were added in the economy. After the bright data traders expect US Federal Reserve to increase interest rates at least once this year. In Intraday Dollar Index touched a high of 96.152 and closed at 96.008 against Dollar.

 

Outlook:

Dollar is expected to trade with positive bias on the back of upbeat job data. More than expected increase in US jobs may spark the expectation of one more rate hike by US Federal Reserve in this year. However, sharp gain may be capped as sell off in global bonds will hurt Dollar. Global bonds yields are rising on expectation of monetary tapering.

 

USDINR:

Indian Rupee appreciated by 0.28 percent on Friday’s trading session as banks were seen selling dollars for their corporate clients. However, sharp gain was prevented as traders remained cautious ahead of Job data from US. Rise in risk aversion in the global markets and FII outflows from local shares added downside pressure on Indian Rupee. FII’s net sold stocks worth Rs 522.08 crores on Friday as per provisional data from NSE. Benchmark stock index 50 shares Nifty Index decreased by 0.09 percent to 9665.80. In Intraday Indian Rupee touched a high of 64.57 and closed at 64.595 against Dollar. 

 

Outlook:

Indian Rupee is expected to trade with negative bias on the back of strong dollar. Dollar is gaining strength as more than expected increase in US jobs may spark the expectation of one more rate hike by US Federal Reserve in this year. Further, rise in risk aversion in the domestic markets may hurt Rupee. Market sentiments are hurt on rising tension between United States and North Korea. Traders will remain careful ahead of macro economic data. USDINR July expected to trade in a range between 64.65 on lower side to 65.20 on higher side with upward trend.

 

EURO-INR:

Euro depreciated by 0.19 percent on Friday’s trading session on the back of strong dollar after upbeat job data from US. However, sharp downside was prevented on expectation of unwinding of massive monetary stimulus by European Central Bank. In intraday Euro touched a low of 1.138 and closed at 1.1401 against Dollar.

 

Outlook:

Euro currency expected to trade with positive bias on the back of expectation of upbeat economic data from Euro Area and hawkish European Central Bank monetary policy meeting minutes. Minutes showed that the policymakers discussed removing central bank bond buying program. However, sharp gains may be prevented as demand for dollar may go up on expectation of one more rate hike this year after upbeat job data from US. EURINR July expected to trade in a range between 73.50 on lower side to 74.25 on higher side with sideways trend.

 

GBP-INR:

Pound depreciated by 0.62 percent on Friday’s trading session on the back of disappointing economic data from the country and strong dollar. Manufacturing production and Industrial production data showed that the activity in the sectors slows down. In intraday Pound touched a low of 1.2867 and closed at 1.289 against Dollar.

 

Outlook:

Pound is expected to trade with negative bias on the back of disappointing economic data from UK. Poor economic data may fuel the worries over economic health of the country. Traders are worried that string of disappointing data may deter Bank of England from raising interest rates. Traders will remain cautious ahead of Brexit negotiations. Demand for dollar may go up on expectation of one more rate hike this year after upbeat job data from US. GBPINR July expected to trade in a range between 83.0 on lower side and 84.0 on higher side with sideways down trend.

 

JPY-INR:

Japanese Yen depreciated by 0.62 percent on Friday’s trading session on the back of strong dollar and divergence in monetary policy. However, demand for safe haven improved on rise in risk aversion in the domestic markets. In intraday Yen touched a low of 114.18 and closed at 113.92 against Dollar.

 

Outlook:

Yen is expected to trade with negative bias on the back of strong dollar and divergence in monetary policy. Further, disappointing economic data from Japan will hurt Yen. However, demand for safe haven may improve on rising tension between United States and North Korea. JPYINR July expected to trade in a range between 56.50 on lower side and 57.20 on higher side with downward trend.

 

Gsec:

Indian bond yield remained flat ahead of US job data and Fresh supply of notes this week from RBI. Reserve bank of India conducted open market sales of bonds worth 100 billion rupees.

 

Outlook:

India bond yield will likely to move upward as RBI announced another open market sale of bonds. RBI will sell 100 billion rupees worth government securities under open market operation on July 20. Further, yields on Indian bonds will track higher global bond yields. Global bond yields are rising on expectation of monetary tapering by major central banks across globe. IRF July 7.59% 2026 expected to trade in a range between 103.70 on lower side and 104.50 on higher side with downward trend.

 

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