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Published on 23-04-2024 10:47 am

Market Roundup 

The Indian rupee is expected to open slightly higher as risk assets recovered while the haven dollar and gold weakened. The forward markets suggest the spot USDINR could open around 83.35 fromthe previous 83.37.

On Monday, spot USDINR declined 10 paise to 83.37 amid dollar inflows from the ongoing FPO. The recovery in domestic equities and lower crude oil prices also weighed on the pair lower. The bias for the pair remains sideways to bullish and expecting downside support at 83.20 and resistance at 83.70.

The dollar is little changed as the S&P 500 Index advanced nearly 1% ahead of tech earnings reports and data later this week. Risk-sensitive commodity currencies led G-10 gainers amid rising industrial metal prices and share gains; WTI oil is little changed and gold fell asIran/Israeltensions appeared to ease.

It is a slightly positive start for the Asian equities as US equities on Monday gained. The S&P 500 increased by 0.87%, and the NASDAQ gained 1.11%. US Treasury yields dropped slightly on Monday – probably as geopolitical tensions continued to ebb.

Markets are currently pricing in a 46% chance of the Fed's first rate cut starting in September, with November not far behind at 42%, according to the CME FedWatch Tool.

There was nothing of note on yesterday’s G-7 macro calendar. Today we get a bargeload of preliminary April PMI data from the G-7 including the US and the Eurozone. Manufacturing PMI data for India may deliver a small statistical pullback after months of strong readings. The manufacturing PMI was 59.1 in March after three months of solid gains. The service sector PMI has been steadier and registered 61.2 in March. We don’t expect much change there

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Published on 23-04-2024 10:27 am

Currency Outlook

Rupee Outlook

* Rupee closed on positive note yesterday amid soft dollar and likely equity inflows. Further, rupee gained strength on rise in risk appetite in the domestic markets coupled with likely dollar sales from state run banks.

* Rupee is likely to depreciate today amid firm dollar and rise in crude oil prices. Dollar and US treasury yields are likely to move north on forecast of improved economic data from US, which may prompt investors to push back rate cut expectations. As per CME FedWatch tool markets are currently pricing in a 46% chance of the Fed's first rate cut starting in September. Additionally, investors will remain cautious ahead of manufacturing and services pmi data from major economies to gauge economic health. USDINR April likely to rise towards 83.50 level as long as it stays above 83.20 level (50-Day EMA).

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Published on 23-04-2024 10:08 am

JPYINR

Observations 

JPYINR trading range for the day is 53.76-54.08.

JPYINR MAY-APR 0.7225 BUY JPYINR APR @ 53.8 SL 53.6 TGT 54-54.2. JPY dropped amid the BoJ’s uncertain policy outlook.

BOJ's Ueda says 'very likely' to hike rates if inflation keeps rising

The annual inflation rate in Japan ticked lower to 2.7% in March 2024 from February's 3-month peak of 2.8%

BUY JPYINR APR @ 53.8 SL 53.6 TGT 54-54.2.

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Published on 23-04-2024 10:07 am

GBPINR

Observation

GBPINR trading range for the day is 102.2-103.92.

GBP dropped influenced by geopolitical risks and statements from major central banks.

Bank of England's Deputy Governor comments on inflation risks fail to support Sterling as it hits new lows.

Mixed economic data from the UK with stagnant retail sales in March, contrasting with modest annual growth.

BUY GBPINR APR @ 102.8 SL 102.5 TGT 103.1-103.3

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Published on 23-04-2024 10:07 am

EURINR

Observations

EURINR trading range for the day is 88.62-89.16.

Euro remained in range as investors awaited flash PMI figures from Europe's largest economies.

Euro zone inflation is likely to decline further and ECB may cut interest rates if its long-standing price growth criteria are met.

The consumer price inflation rate in the Euro Area was confirmed at 2.4% year-on-year in March 2024

BUY EURINR APR @ 88.75 SL 88.55 TGT 88.95-89.1

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