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Key Highlights

* Gold saving funds see Rs 864-crore inflow in April

* Yuan will be kept at reasonable and balanced levels- PBOC Vice Gov

* Japan is to set to extend virus emergency in Tokyo

Indian rupee

Last week, the Indian Rupee appreciated by almost 0.44 percent owing to the bullish trend in Sensex and Nifty on back of strong earnings report along with fall in DXY amid focus on the U.S inflation and stalled US treasury yields. Moreover, anticipated dollar inflows and improving pandemic situation in India also boosted the market sentiments which worked in favour of INR.

Today, the Indian Rupee is likely to trade with a positive bias on back of probable inflows due to MSCI Rebalancing. However, markets shall be a bit cautious as the focus would be on to what extent the Reserve Bank of India will allow the local currency to appreciate further.

USDINR is likely to trade sideways to lower today.

Euro

Last week, EURUSD made a one-sided move towards north by almost 0.67 percent after the Rating Agency Moody’s pointed out that the EU recovery funds will be beneficial for southern Europe. Moreover, several member nations of EU are opening up as most of the citizens have got vaccinated with at least one dose of a COVID-19 vaccine, and infections are falling.

Today, EURUSD is expected to trade in a range bound manner as Swiss, French and German banks will be closed today. Markets shall also react to ECB President Christine Lagarde’s statement where she said that it was still too early for the bank to discuss winding down its 1.85 trillion-euro emergency bond purchase scheme.

EURINR is likely to trade sideways to lower.

GBP

Last week, Sterling Pound traded in a volatile manner. It initially surged towards 1.4219 levels and later on plunged. Towards the end, the currency once again moved higher towards 1.4212 levels. Reason behind the initial strength could be attributed to the gradual lifting of strict coronavirus restrictions in the UK which shall have a positive impact on the economic activity.

Later, the currency moved lower post the release of UK’s inflation rate that more than doubled in April, looking set to rise above the Bank of England’s (BoE) target of 2%. Towards the end, GBPUSD once again moved higher on back of lower DXY.

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