USDINR spot appreciated by 0.62 percent yesterday; touching 16- month high after BJP’s massive victory in the major state election which has created good sentiments in the Indian markets. BJP party with its coalition partners won 325 seats against 403 seats in member assembly of Uttar Pradesh thereby increasing the chances of Modi’s win in general elections of 2019. This encroachment will help BJP to push reform agenda in the upper house of parliament, where the party currently has a minority. Both Sensex and Nifty are also trading in green. In today’s trading session, USDINR spot is expected to trade sideways to higher as positive sentiment in the market continues. However, heightened possibility of US rate hike in today’s FOMC meet will keep the rupee a bit pressurized against the US Dollar.
Euro currency traded lower by 0.48 percent (GBPUSD) and 1.35 percent (GBPINR) yesterday as heightened possibility of US rate hike has prompted the traders to invest in dollar denominated assets which dented the demand for the shared currency. Moreover, the disappointing release of German ZEW Economic Sentiment data from Germany has added to the woes. In today’s trading session, EURINR spot is expected to trade lower as the Dutch go to the polls today for voting in an election seen as a test of anti-immigrant and nationalist feeling magnified by a deepening dispute with Turkey.
Sterling pound traded lower by 0.54 percent (GBPUSD) and 1.17 percent (GBPINR) yesterday after both the Houses of the Parliament passed a bill paving the way for Theresa May to kick off the Brexit process by triggering Article 50. The sentiments now look bearish for Pound as the road of uncertainty will prompt the traders to play safe. Moreover, in tomorrow’s BoE policy meeting there is a possibility of no-change in policy with a pinch of dovish tone, following the spring budget statement. Due to all the above reasons, GBPINR spot is likely to trade lower.
USDJPY spot appreciated by 0.12 percent while JPYINR fell by 0.51 percent yesterday; all thanks to rupee appreciation post BJP’s victory in state elections. There are some series of uncertain events lined up like the Dutch elections which is to take place today, the FOMC meeting which is again scheduled to be released today along with the recent crude oil update which has played negatively on the prices. This has boosted the demand for safe haven Yen. Today, JPYINR spot is likely to trade sideways on fear of RBI intervention.
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