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Published on 26-04-2024 11:27 am

Market Roundup 

* The Indian rupee is expected to open flat following stable Asian currencies. Implied opening fromforwardssuggeststhe spotmay starttrading around 83.30 fromthe previous 83.325.

* Spot USDINR little changed at 83.3250 on Thursday, down 0.2% this week. India’s 10-year yields rose 2bpsto 7.21% on Thursday, down 2bpsthis week.

* In the near term, spot USDINR is expected to consolidate between 83.20 to 83.50. The demand for dollar remained muted amid stable commodity prices. The foreign institutions inflows were seen in the primary market but outflow outpacing the inflows as they were net seller of equities and debts.

* Dollar Spot Index held steady, poised to close the week with a 0.3% decline. 10-year Treasury yield was little changed after surging 6bps on Thursday. The yen traded in a tight range after a recent slump as traders await the Bank of Japan’s policy announcement to see whether it will offersome supportfor the beleaguered currency.

* Elsewhere, oil headed for a weekly gain ahead of US inflation data that may give further clues on the path forward for monetary policy, shaping appetite for risk assets including commodities such as crude

* US GDP measured an annualised rate of 1.6% in the first quarter, the weakest pace of growth since the second quarter of 2022 when the economy contracted. That’s a steep slowdown fromthe fourth quarter’s 3.4% rate and also below the 2.2% rate economists projected

* US pending home sales — a forward-looking indicator based on contractsigningsrather than closings — climbed 3.4% in March, which was “the best performance in a year,”. That was well above the 0.3% decline forecast by economists.

* US inflation surged, with the personal consumption expenditures (PCE) price index, excluding food and energy, increasing at 3.7% after rising at 2% in the fourth quarter.

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Published on 26-04-2024 11:25 am

Currency Outlook

Rupee Outlook

• Rupee ended largely unchanged as investors remained cautious ahead of slew of economic data from US to gauge economic health of the country and get fresh cues on rate trajectory. While, optimistic domestic market sentiments and soft dollar lent support to rupee

• Rupee is likely to depreciate today amid expectation of rise in US dollar and surge in treasury yields. Yields are moving north as data showed price pressure elevated more than expected in the first quarter despite of growth seen weaker than anticipated. Core PCE rose by 3.7% in Q1 CY24 above expectations for a 3.4% increase. Investors fear that rise in inflation print for first quarter, signals today’s PCE number will be higher. Additionally, surge in crude oil prices will hurt rupee. USDINR May likely to find support near 83.30 level (50-Day EMA) and rise towards 83.50 level.

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Published on 26-04-2024 11:24 am

JPYINR

Observations 

JPYINR trading range for the day is 53.49-53.79.

JPYINR MAY-APR 0.6075 BUY JPYINR APR @ 53.6 SL 53.4 TGT 53.8-54. JPY dropped as the Bank of Japan kicks off its two-day monetary policy meeting.

BOJ Governor Ueda said that the central bank may raise interest rates again

Japan Finance Minister Shunichi Suzuki said he won’t comment on foreign exchange levels.

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Published on 26-04-2024 11:23 am

EURINR

Observations

EURINR trading range for the day is 177.76-179.12.

Euro gains as stronger than expected PMI data from the bloc

BoE Governor Andrew Bailey expects a sharp drop in April’s inflation.

Bank of England officials suggested the central bank was becoming more confident that UK inflation is subsiding

BUY EURINR APR @ 89 SL 88.8 TGT 89.2-89.4.

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Published on 26-04-2024 11:23 am

USDINR

Observations

USDINR trading range for the day is 83.24-83.44.

Rupee settled flat amid dollar demand from importers and bets that US Federal Reserve rate cuts are not imminent.

The US economy grew only 1.6% in Q1, the least since a contraction in Q2 of 2022

The Indian economy needs to grow at a rate of 8–10% per annum over the next decade to reap the demographic dividend – RBI

SELL USDINR APR @ 83.35 SL 83.45 TGT 83.25-83.15.

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