NRI Newsletter - Market News

NRI Newsletter - Market News

 

TODAY is: Thursday, 22nd June, 2017

USD/INR: as on 21st June, 2017

The rupee managed to pare its initial steep losses and closed with a marginal fall of 3 paise at 64.52 a dollar on sustained demand for the American currency from importers and banks. Steady capital outflows amid a caution ahead of the release of RBI's minutes of its bi-monthly policy meeting largely weighed on forex trade. Subdued local equities too impacted the trading pattern. The rupee opened sharply lower at 64.63 per dollar from Tuesday's closing of 64.49 at the Interbank Foreign Exchange (Forex) market. Later, it tumbled to hit a fresh low of 64.67 mainly pressurized by strong dollar demand amid buoyant greenback overseas trends. However, the rupee reclaimed most of its early losses towards the fag-end trade on the back of smooth dollar supply before settling at 64.52, a modest fall of 3 paise, or 0.05 per cent. The domestic currency managed to sidestep early volatility following the MSCI decision to include China A- Shares in its global emerging market index amid capital outflows worries. The MSCI decision will add 222 China A-share stocks starting in May 2018. While, Chinese stocks hit an 18-month high following MSCI's decision to include them in its global benchmark equity index for the first time. The RBI, meanwhile, fixed the reference rate for the dollar at 64.6025 and for the euro at 71.9413. In cross-currency trades, the rupee fell back against the pound sterling to finish at 82.00 from 81.69 per pound and retreated against the Euro to close at 71.94 from 71.88 earlier. The local unit also drifted against the Japanese yen to conclude at 57.94 per 100 yens from 57.80 yesterday.

USD/INR as on 21st June, 2017

Currency

OPEN

HIGH

LOW

CLOSE

USDINR

64.6300

64.6750

64.4850

64.5200

Highest till date: 68.8650 on 31st November, 2026

 

Forward premium(%) as on 21st June, 2017

Periods

1 Month

3 Month

6 Month

12 Month

Premiums

4.58/4.92

4.66/4.77

4.56/4.62

4.49/4.52

 

 

 

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

(Updated as on 22nd June, 2017 @10.00am)

 

Cash/Tom: 0.50/1.50        Cash/Spot: 3.00/6.00        

Tom/Spot: 2.50/4.50         Spot/Next: 0.50/1.50

 

Cash Date:  22nd June, 2017 

Tom Date : 23rd June, 2017 

Spot Date : 26th June, 2017 

 

 

Outlook for the day (22nd June, 2017)

 

The Rupee expected to show trading in a range 64.40 and 64.65 levels. Major currencies are expected to trade higher against the Greenback.

 

 

MAJOR WORLD CURRENCIES: as on 21st June, 2017:

USD: The dollar steadied against a basket of global currencies, after data showed sales of existing U.S. homes unexpectedly rose in May while a surge in the pound limited upside momentum. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.07% to 97.33. The National Association of Realtors said strong demand and inexpensive mortgages were driving up prices at an unsustainable rate, as sales of existing homes rose 1.1% in May to an annual rate of 5.62 million. Analysts had forecast U.S. existing home sales to decline by 0.5%. The unexpected increase in existing home sales spurred sentiment on the dollar, after the greenback fell to session lows pressured by a surge in the pound, following bullish comments on an interest rate hike from the Bank of England chief economist Andy Haldane. Haldane said he might join those calling for a rate rise in the coming months, adding that a “partial of withdrawal” of the additional policy measures would be prudent “relatively soon”. GBP/USD rose to a session high of $1.2710 but gains were pared later during the session, as investors appeared to take profit. EUR/USD tacked on 0.12% to $1.1148, while EUR/GBP fell by 0.18% to 0.8800. USD/CAD traded at C$1.3335, up 0.51%. The dollar traded roughly flat against its Japanese counterpart, with USD/JPY at Y111.39. Commodity-linked currencies worldwide were hit hard by plunging oil prices. Global crude crashed into a bear market territory on hardening concern over global supply glut. Crude prices took a deep cut on reports that Libya - a member of OPEC exempt from the cartel's coordinated output cut deal - is producing at the highest level in four years. So far this year, oil has lost 20 per cent in value, its worst performance for the first six months of the year since 1997. 

EUR:  EUR hit a fresh low of 1.1117 on yesterday's session, holding just above the major support levels at 1.1105/10. While downward momentum is not that strong, there is ample room for further weakness towards 1.1105/10 amidst a cloud of a hawkish dollar stance since last week. A break below this level would shift the focus to a major fallout near 1.1070 levels but based on the current momentum, this level is unlikely to come into the picture for now. The pair has seemed to rebound from here a few times in the past. Moreover the bulls that had supported it to 1.1300 levels for a very long time in retrospect might come into play. Northwards even a trend beyond 1.1155 and 1.1175 are acting as a very strong level now. Downward momentum continues to improve and the risk of a break below 1.1105/10 increased further. As highlighted earlier, a break below 1.1105/10 would indicate that EUR has moved into a bearish phase. This scenario would not be surprising unless EUR can move and stay above 1.1175 within the next 48 hours.

GBP: The British Pound snapped back from a fresh monthly low of 1.2589 as Bank of England (BoE) Chief Economist Andrew Haldane argued the central bank should normalize monetary policy ‘well ahead of current market expectations,’ but the near-term outlook for GBP/USD remains tilted to the downside as it extends the bearish sequence from earlier this week. The growing rift within the BoE may tame the recent weakness in the pound-dollar exchange rate as Mr. Haldane argues it ‘would be prudent’ to remove the record-low interest rate in the second-half of 2017, and it seems as though there will be a greater dissent at the next policy meeting on August 3 especially as Governor Mark Carney remains in no rush to move away from the highly accommodative policy stance. Analysts feel that comments from BoE economist Haldane that favoured removing some stimulus echoes the sentiment revealed by last week’s 5-3 split on holding policy unchanged at the BoE’s latest policy meeting. Meanwhile, intraday trends look a little more positive for the GBP, with Cable trading well off the early London lows. That suggests pretty firm bounce backs from 1.2600 levels and scope for a squeeze back up to 1.2700 levels. Cable is still in the bearish territory and we think after Cable gains to the 1.2750/75 range would attract best selling interest from a technical point of view.

GOLD: Gold made a steady recovery from five-week lows during the Wednesday's session, as lower U.S. dollar flattened U.S. Treasury yield curve to nearly ten-year lows. Spot gold on Kitco.com was up 0.57% at $1,253.30 at the time of publication, while August Comex gold increased 0.69% to $1,254.40. The yellow metal advanced as the U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, retreated from a one-month high to 97.52. The short-term movement in gold is driven by exogenous factors, such as the U.S. dollar and inflation footprint. During the previous session, the risks of monetary policy normalization increased in the U.K. after the central bank’s chief economist, Andy Haldane said on Wednesday that he was likely to support an interest rate hike later this year. Overall, the development in the U.K. along with the Fed’s known readiness to tighten could prove to be bad for gold. None of those factors are particularly supportive for gold. It seems very unlikely that the risks could spell out a period of weakness in gold. If we see a break down below $1,245, that could lead to an additional drop to as low as $1,210. Later today, we would be eyeing the U.S. weekly jobless claims, monthly home price index, and the U.S. Leading economic indicators.

MAJOR WORLD CURRENCIES:

as on 21st June, 2017

 

CURRENCY

OPEN

HIGH

LOW

CLOSE

GBP/USD

1.2627

1.2709

1.2587

1.2668

EUR/USD

1.1131

1.1169

1.1126

1.1166

AUD/USD

0.7577

0.7586

0.7540

0.7550

USD/JPY

111.44

111.72

111.04

111.37



Foreign Currencies

Updated: 17:30 hrs (1200 GMT) on 21st June, 2017

 

USD/INR: 64.5250 [FXIR]

Against

USD

INR

1 EUR    =

1.1142

71.89

1 GBP    =

1.2693

81.90

100 JPY  =

0.8976

57.91

1 AUD    =

0.7561

48.79

1 CHF    =

1.0260

66.02



Precious Metals

Updated: 17:30 hrs (1200 GMT) on 21st June, 2017

 

Gold ($/oz)

1244.68

Silver ($/oz)

16.4100



Stock Indices

(As on 21st June, 2017)

 

Index Close

20th June

21st June

BSE Sensex

31297.53

31283.64

NSE Nifty

9653.50

9633.60

Dow Jones

21467.14

21410.03

NASDAQ

6188.03

6233.95

 

 

 

Major Economic Data Releases for the Day

Date

Region

Time(IST)

Description

22.06.17

CAD

06:00 PM

Core Retail Sales m/m

22.06.17

CAD

06:00 PM

Retail Sales m/m

22.06.17

USD

06:00 PM

Unemployment Claims

22.06.17

USD

07:30 PM

FOMC Member Powell speaks

22.06.17

USD

09:30 PM

Gov Board Member Maechler speaks

 

 

 

 

 

 

The views contained herein are those of individuals and not necessarily those of the Bank.  This is for information purpose only and no recommendations are intended.  While due care has been taken in preparation of this communication, IOB cannot be held responsible for any consequences of any decisions based on this information. Comments/Suggestions may be freely emailed to feddeal@iobnet.co.in