Last Updated on: 17/05/2024
TODAY: FRIDAY, 17th May, 2024
USD/INR:
NR likely to open around 83.45/50
Dollar has stabilized after the post-CPI fall, and is now waiting for the next trigger to support the rate cut scenario. Dollar Inex is at 104.60, with EUR at 1.0855, GBP at 1.2655 and JPY at 155.85. The US 10y yield has seen yet another dip and is now at 4.36%. The yields remain docile, which augur well for risk assets. US equities ended mildly in the red, after the strong close of the previous day. DOW fell 0.2% yesterday. Indian indices had handsome gains yesterday, with Sensex seeing a uptick of 0.9%+.
With the CPI out of the way, Dollar could remain range-y until the month-end PCE data. Rate cut hopes have been bolstered by the latest data points, and the narrative has shifted towards Dollar softness. Crosses such as EUR could have some more upside now in the short term, but the economic sluggishness of these major economies will force their respective central banks to follow the Fed in rate cuts sooner than later. As for USDINR, Rupee could remain stuck until the election trigger on June 4th or at least exit polls on June 1st.
MAJOR WORLD CURRENCIES:
USD:
The US dollar's recent downtrend halted, aligning with forecasts by financial institution ING. Analysts observed that US economic data has not provided sufficient momentum to drive a significantly weaker dollar at this time.
This comes after jobless claims dropped to 222,000 from a previous week's increase to 232,000. The labor market had shown similar patterns in January, with claims peaking at 225,000 before falling back to the range of 200,000 to 210,000.
ING anticipates a potential stabilization in USD currency pairs as investors await the release of the April core Personal Consumption Expenditures (PCE) price index, scheduled for May 31. The firm suggests that cross-asset volatility could remain subdued in the coming weeks, which may boost the search for carry trades.
Consequently, they express a lack of optimism for a recovery in the Japanese yen, currently deemed the most attractive funding currency.
In related developments, China's latest economic figures influenced market sentiment. The country reported a 6.7% year-on-year increase in April industrial production, surpassing the expected 5.5%.
EUR/USD rose for the third session in a row and approached the 1.0900 hurdle always on the back of further USD-selling.The ECB’s Financial Stability Review will be the sole release on the domestic docket on May 16.
GBP/USD extended further its march north and traded at shouting distance from the 1.2700 hurdle. The BoE’s Financial Stability Report will be out on May 16.
USD/JPY interrupted its multi-day uptrend and receded to multi-session lows in the sub-155.00 zone following increasing weakness in the Dollar and declining yields. The advanced Q1 GDP Growth Rate, final Industrial Production prints and weekly Foreign Bond Investment are expected on May 16.
A robust session in the risk-linked assets propelled AUD/USD to levels just shy of the 0.6700 hurdle ahead of key data in Australia. The release of the labour market report and the speech by RBA’s Hunter are all due on May 16 in Oz.
GBP:
The GBP/USD pair posts modest gains near 1.2670 during the early Asian session on Friday. Meanwhile, the USD Index (DXY) recovers some lost ground after retracing to multi-week lows near 104.00 in the previous session. The Federal Reserve (Fed) sticks to cautious tones regarding inflation and the chance of rate cuts this year. Investors will take more cues from the Fed’s Kashkari, Waller, and Daly speeches later in the day. Several Fed officials emphasized the need to keep borrowing costs high for longer as they await more evidence that inflation is easing. On Thursday, Fed Bank of Atlanta President Raphael Bostic cautioned about the need for patience with interest rates, saying that there is still a lot of pricing pressure in the US economy. Cleveland Fed President Loretta Mester stated that it might take longer than expected to gain confidence about the path of inflation, adding that the Fed should hold its restrictive stance for longer. The cautious approach from the Fed policymakers has provided some support to the Greenback and weighs on the major pair.
EUR:
EUR/USD eased slightly on Thursday, falling back below 1.0880 as the Greenback broadly recovers losses from earlier in the week. The pair remains notably up for the trading week, but a late break for the US Dollar is on the cards as investors second-guess the Fed Reserve’s (Fed) stance on rate cuts and keep one foot in the safe haven USD.
A June rate cut from the European Central Bank (ECB) is getting priced in by traders. ECB policymakers have been prodding markets cautiously in recent appearances, but ECB Governing Council member and Governor of the Latvian central bank Martins Kazaks announced Thursday that a June rate cut is definitely on the table. Markets will be keeping a close eye on next week’s Purchasing Manager’s Index (PMI) figures that are due from both the EU and the US.
Gold
Gold prices fell slightly on Friday, trimming some of their gains for the week as comments from a slew of Federal Reserve officials offered a more sobering outlook on interest rate cuts.
The yellow metal had risen to nearly $2,400 an ounce this week in the immediate aftermath of some soft U.S. economic readings. But it pulled back from these levels on Thursday and Friday.
Spot gold steadied at $2,377.40 an ounce, while gold futures expiring in June fell slightly to $2,381.10 an ounce by 00:19 ET (04:19 GMT).
The yellow metal fell on Thursday after a string of Fed officials cautioned against bets on immediate reductions in interest rates.
Several members of the central bank’s rate setting committee said the central bank will need much more convincing that inflation was coming down beyond a marginally soft inflation reading for April.
This saw traders begin pricing out some expectations for a rate cut in September. The dollar and U.S. Treasury yields also rebounded from earlier losses this week.
USD/INR as on 16th May, 2024
Currency
OPEN
HIGH
LOW
CLOSE
USD/INR
83.4650
83.5050
83.44
83.50
Forward premium (%) as on 16th May , 2024
Periods
1 Month
3 Month
6 Month
12 Month
Premium
1.09/1.23
1.26/1.30
1.38/1.40
1.67/1.69
USD/INR Cash/Tom/Spot Levels: (in Paisa)
(Updated as on 17th May 2024, @ 09.00am)
Cash/Tom: 0.40/2.40 Cash/Spot: 0.50/3.20
Tom/Spot: 0.10/0.80 Spot/Next: 0.20/1.20
Cash Date: 17th May 2024
Tom Date: 21th May 2024
Spot Date: 22st May 2024
Outlook for the day 17th May 2024
Rupee expected to trade in range of 83.40-83.60
MAJOR WORLD CURRENCIES: as on (16th May, 2024)
CURRENCY
GBP
1.2679
1.2700
1.2640
1.2666
EUR
1.0884
1.0894
1.0853
1.0865
AUD
0.6692
0.6714
0.6652
0.6677
JPY
154.86
155.52
153.57
155.38
CHF
0.9022
0.9062
0.8986
0.9060
XAU
2386.06
2397.32
2370.79
2376.44
Foreign Currencies
Updated: 17:30 hrs. (12:00 GMT) on 16th May, 2024
USD/INR: 83.5050FXIR]
Against
USD
INR
1 EUR =
1.0864
90.7198
1 GBP =
1.2655
105.6756
100 JPY =
155.31
53.7667
1 AUD =
0.6667
55.6728
1 CHF =
0.9044
92.3319
Precious Metals
Updated: 17:30 hrs. (12:00 GMT) as on 16th May, 2024
Gold ($/oz)
2377.40
Silver ($/oz)
29.67
Stock Indices
Index Close
15th May, 2024
16th May, 2024
BSE Sensex
72987.03
73663.72
NSE Nifty
22200.55
22403.85
Dow Jones
39908.00
39869.38
NASDAQ
16742.39
16698.32
Major Economic Data Releases for the Day
Date
Region
Time (IST)
Description
NO MAJOR DATA AVAILABLE TODAY
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