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Market Roundup

The Indian rupee is expected to open slightly higher following unwinding in the greenback against major currencies.

The dollar was soft on Thursday as traders assessed the U.S. interest rates outlook in the wake of comments from Federal Reserve officials that cemented expectation of monetary settings remaining restrictive for a while longer.

The forward market indicates the spot USDINR opening around 83.45 from Tuesday’s close of 83.54. On Wednesday, the forex market remained closed on account of Ram Navami.

On Tuesday, spot USDINR gained 9 paise to 83.54, closing at a record high level. Technical set-up remains bullish for the USDINR but unwinding in the greenback against major currencies and lower crude oil prices could be headwinds in the near term. The pair has support at 83.20 and resistance at 83.70.

The dollar index, which measures the U.S. currency against six peers, was last at 105.92, inching away from the five-and-a-half-month high of 106.51 on Tuesday, and is up 4.5% this year. The pound held gains after comments from Bank of England Governor Andrew Bailey and data showing UK inflation slowed less than expected. European Central Bank President Christine Lagarde said she sees signs of recovery and carefully looks at the exchange rate and the inflation impact.

The US stock market saw its longest losing streak since January as a handful of big tech companies sold off.

Equities fell for a fourth straight day, with the S&P 500 extending a drop from its all-time high to more than 4%. Elsewhere, Crude oil prices fell as doubts over an escalation of tensions between Iran and Israel emerged.

The lack of an immediate response by Israel to Iran’s weekend attack has seen the market reduce its geopolitical risk premium. Markets are pricing in 44 basis points of cuts from the Fed this year, drastically lower than the 160 bps expected at the start of the year, with September becoming the latest starting point of the easing cycle, showed the CME FedWatch Tool.

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