TODAY: WEDNESDAY, 22^th May, 2024

USD/INR:

INR likely to open around 83.30

Dollar is steady on absence of market moving data, and currencies are trading in tight ranges. Fed officials continued to sound non-committal on rate cuts yesterday but remained confident of a cut being the next step. Dollar Index is at 104.60 with EUR at 1.0860, GBP at 1.2720, and JPY at 156.30. US 10y yield is trading muted at 4.41%. US indices ended around 0.2% in the green, and markets are awaiting Nvidia results today. Indian indices were mixed yesterday with the Sensex down 0.3% and the broader BSE500 index rising 0.2%.

Rupee is now comfortably ensconced in its range with no real threat to its stability. The paucity of key data for the next few days will ensure that the current INR range will reign unchallenged. Today’s FOMC minutes might not create much activity for the Rupee.

MAJOR WORLD CURRENCIES:

USD:

The US Dollar Index (DXY) is seen at 104.6 level on Tuesday with mild losses. Amid signals of robust growth and persistent inflation in the US, Federal Reserve (Fed) officials continue to express caution about premature easing. The market's focus is steadily shifting toward the forthcoming release of the Federal Open Markets Committee (FOMC) Minutes on Wednesday and mid-tier data on Thursday and Friday including S&P PMIs and Durable Goods Orders.

As long as the US economy continues its robust growth while enduring inflation, Fed officials will lean toward caution, which could limit the downside for the USD.

GBP:

The CPI data will highlight the UK calendar on Wednesday at 06:00 GMT. The Pound Sterling is battling the 1.2700 round level against the US Dollar in the lead-up to the inflation release. Meanwhile, the US Dollar Index is holding its recovery momentum on waning expectations of aggressive interest rate cuts by the US Federal Reserve (Fed).

A hotter-than-expected headline and core inflation data could pour cold water on market expectations of a June BoE rate cut, providing a fresh lift to the Pound Sterling. In such a case, GBP/USD could unleash additional recovery toward the 1.2800 level. On the other hand, GBP/USD could retest the 1.2600 demand area if significantly softer UK CPI readings affirm BoE rate cut bets for next month.

EUR:

EUR/USD remains stable ahead of the release of the Minutes from the Federal Open Market Committee (FOMC) meeting held on May 1, scheduled for Wednesday. The pair hovers around 1.0850 during the Asian trading session.

The Federal Reserve (Fed) maintains a cautious stance regarding inflation and the possibility of rate cuts in 2024. Federal Reserve Bank of Boston President Susan Collins, speaking at the event "Central Banking in the Post-Pandemic Financial System" on Wednesday, emphasized that progress toward interest rate adjustment will take longer and stressed the importance of patience as the right policy for the Fed.

EUR/USD remains stable ahead of the release of the Minutes from the Federal Open Market Committee (FOMC) meeting held on May 1, scheduled for Wednesday. The pair hovers around 1.0850 during the Asian trading session.

The Federal Reserve (Fed) maintains a cautious stance regarding inflation and the possibility of rate cuts in 2024. Federal Reserve Bank of Boston President Susan Collins, speaking at the event "Central Banking in the Post-Pandemic Financial System" on Wednesday, emphasized that progress toward interest rate adjustment will take longer and stressed the importance of patience as the right policy for the Fed.

Gold

Gold price (XAU/USD) trades on a negative note on Wednesday after retreating from a record high on Monday. Members of the Federal Reserve (Fed) warned that the US central bank needed much more convincing that inflation was easing before it could begin cutting interest rates, emphasizing the Fed is likely to keep rates higher for longer. This, in turn, might boost the Greenback and weigh the USD-denominated gold lower. 

Nonetheless, the yellow metal’s downside might be limited amid the renewed US-China trade tensions, Middle East geopolitical tensions, and the strong demand from central banks and Asian buyers, which might provide some support to the yellow metal. Later on Wednesday, gold traders will keep an eye on FOMC Minutes, along with the Fed’s Goolsbee speech. 

USD/INR Cash/Tom/Spot Levels: (in Paisa)

(Updated as on 22^th May 2024, @ 09.00am)

 Cash/Tom:    0.20/1.20                  Cash/Spot: 0.80/3.40

 Tom/Spot:     0.60/2.20                  Spot/Next:  0.10/0.80

Cash Date:   10^th May   2024

Tom Date:     11^th May   2024

Spot Date:    12^th May   2024

Outlook for the day 22^th May 2024

Rupee expected to trade in range of 83.20-83.40

MAJOR WORLD CURRENCIES: as on (22^th May, 2024)

Foreign Currencies

Updated: 17:30 hrs. (12:00 GMT) on 21^th May, 2024

Precious Metals

Updated: 17:30 hrs. (12:00 GMT) as on 21^th May, 2024

Stock Indices

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