Published on 5/12/2019 3:10:22 PM | Source: ICICI Direct Ltd

Daily Currency Outlook Of 5 December 2019 - ICICI Direct

Posted in Currency Report| #Currency Tips #ICICI Direct

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* The rupee closed higher by almost 15 paise yesterday amid news that US-China talks have been progressing well and could move towards the first phase of deal. It is likely to open slightly higher today while investors would be awaiting the outcome of RBI’s policy announcement

* The US$ ended the session with further losses as risk sentiment improved amid positive news on the US-China trade talks front. CNY appreciated sharply post the news thereby supporting most of the EM currencies, including the rupee. Investors would be looking ahead at the US November payrolls data on Friday for further cues on dollar  

* Equity benchmarks snapped their three session’s losing streak and ended Wednesday’s session at 12043, down 0.4%

* The market breadth turned positive as Nifty midcap relatively outperformed

* Domestic benchmark 10-year yields ended unchanged at 6.47% in the previous session. Growing worries over domestic growth and weakness in the rupee could cap a sharp appreciation in domestic debt

* US 10-year benchmark yields closed higher at 1.77% buoyed by positive risk sentiment. Investors are likely to track the upcoming US November employment data while awaiting clarity on trade deal progress

* Gold witnessed profit booking due to positive risk sentiment. It is anchored to development over US-China trade talks as well as global growth worries

* Brent oil zoomed sharply higher due to upbeat risk sentiment and favourable oil data. It closed higher by over 3.58% ahead of Opec+ meeting in December. US agency EIA reported a sharp drawdown of 4.8 mb against expectation of 1.48 mb drawdown

* Foreign institutional investors (FII) were net buyers to the tune of | 1098 crore on December 3, 2019

* FIIs have been net sellers of more than | 320 crore in December 2019

* The dollar-rupee December contract on the NSE was at 71.67 in the previous session. Open interest increased 8.63% in the previous session

* We expect the US$INR to meet supply pressure at higher levels. Utilise upsides in the pair to initiate short positions



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