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The dollar nudged higher on Wednesday - HDFC Securities
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Market Roundup
* The Indian rupee is expected to open slightly lower following a rebound in the greenback post hawkish comment from fed members. The forward markets indicate USDINR opening around 83.46 from the previous close of 83.43.
* Spot USDINR fell for the third day in a row and erased the 20th June gains. The expectation of dollar inflows and better economic data supported the rupee. Technically, the pair has support at 83.30 and resistance at 83.70. In the short term, the pair is expected to consolidate in the said range.
* India is inching toward a sustained growth of 8%, but price pressures must be kept in check, the RBI’s Shaktikanta Das said.
* Forex:
* The dollar nudged higher on Wednesday. The dollar is on track for a second successive quarter of gains, but the risk-reward equation from here may be skewed asymmetrically to the downside. The flip side of the argument is that the currency has priced in all the good news out there, and it’s hard to see the incentive for the marginal investor to keep buying into the currency from here.
* US consumer confidence eased on a more muted outlook for business conditions, the job market and incomes.
* Fed Governor Michelle Bowman said she sees some upside risks to the inflation outlook. Her colleague Lisa Cook said it will be appropriate to reduce rates “at some point,” adding that she expects inflation to improve gradually this year.
* Equities:
* Stocks in Asia fell as Federal Reserve officials said they wanted more evidence of cooling inflation before lowering interest rates. Turnaround Tuesday lived up to its name, with market action essentially being the reverse of Monday’s losses. We saw big tech bounce while the rest of the market (and assets like commodities) sold off.
* Commodities:
* In commodities, oil held a decline after an industry report signalled a small build in US crude inventories. Gold fell following more hawkish comments from the Fed.
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