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Market Roundup

The rupee is expected to open slightly lower following mixed risk tone and dollar outflows from the debt market. The forward markets suggest USDINR opening around 83.67 at local bourses.

The Indian rupee declined to an all-time low as broad dollar strength weighed on most emerging Asian currencies. The Rupee declined 0.3% to 83.67 against the greenback on Thursday, weakening past the previous low of 83.5750 in April. The central bank has allowed the rupee to weaken, though it intervenes to curb wild swings. So far this year, the rupee is the second best-performing currency among Asia currencies after the Hong Kong dollar.

On Thursday, the rupee settled at 83.65 with a loss of 19 paise. Technical setup remains bullish for USDINR and it could head towards 83.80 and 84.10 in the coming days. Though the trend remains bullish there could be some retracement towards 83.45 amid dollar inflows in the coming week.

Forex: 

* The dollar strengthens amid monthly hedging flows and higher yields; 10-year Treasury yields pared gains, now up 3 basis points to 4.25%.

* The yen held steady in early Friday trading after its longest losing streak since March putting traders on alert for potential intervention. The US added Japan to its “monitoring list” for forex practices but stopped short of labelling it a currency manipulator.

* The pound traded lower after the BOE decision to hold rates steady is seen as a “dovish hold”. The decision revived expectations of a summer cut by the British central bank.

* All eyes on the Fed’s July meeting. A couple of fed funds bets stand to benefit if there are ramped-up expectations of a rate cut next month.

Equities:

* Asian stocks crept higher after US shares hit an intraday record overnight. The S&P 500 briefly topped 5,500 on Thursday before losing traction, while the high-flying tech group powering the bull run came under pressure.

Commodities:

* WTI headed for a back-to-back weekly gain after EIA data showed US stockpiles unexpectedly dropped last week. Exports rebounded to above 4 million b/d.

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