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FUNDAMENTALS OF CURRENCY:

The dollar index extended the rebound to 94.2 on Friday, getting closer to a one-year high of 94.6 reached on October 12th as currency traders weigh the odds that the current spike of inflation will lead central banks to move more quickly to scale back their pandemic-triggered monetary policy support than they had planned to. Headline price pressures as gauged by the personal consumption expenditures price index including food and energy surged 4.4% from a year earlier in September, the most since January 1991.

The Japanese yen was little changed around 113.60 yen per US dollar on Friday, after the Bank of Japan kept accommodative monetary policies in place and after the central bank governor gave remarks on the yen’s recent weakness. Haruhiko Kuroda said that the yen’s recent weakness is “definitely positive” for Japan’s economy and expressed desire for the currency’s movement to be more stable and reflect economic fundamentals, but downplayed fears over rising import costs and its effect on the country’s recovery.

The euro tumbled more than 1% to below $1.16 at the end of October, as investors digested a batch of economic releases including the Eurozone GDP and inflation numbers, as well as the outcome of the European Central Bank's decision and press conference on Thursday. The Eurozone inflation rate jumped more than expected to a new 13-year high, a day after the ECB decided to leave monetary policy unchanged and maintain its guidance on interest rates, reiterating its narrative that price pressure is temporary.

USDINR

Technical indicators

RSI- 55.1486

MACD- 0.1925

MOVING AVERAGES (20,50,100)- (74.9785/74.1861/74.2492)

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