FOREX MARKET OUTLOOK REPORT TODAY : 22/01/2018
* USDINR trading range for the day is 63.59-64.07.
* Rupee gained led by financial stocks amid improved investor sentiment after the government decided to cut tax rates on certain products and services.
* India’s December trade deficit widened to its highest in more than three years as higher import bills for gold and crude oil weighed on rising exports.
* Further, sustained foreign funds inflow tracking firm trend in other global bourses also boosted local investors’ sentiment.
* EURINR trading range for the day is 78-78.6.
* Euro remained supported as sentiment on the greenback was vulnerable as U.S. lawmakers were struggling to agree on a federal budget deal.
* Many investors believe the European Central Bank will edge towards ending its bond purchase program later this year.
* Germany’s producer price inflation eased in December, figures from Destatis showed.
Euro EURUSD appreciated by 0.7 percent while EURINR depreciated by 0.95 percent during the same time frame. ECB spokesperson commented on cutting down the 2.55 Euro monetary stimulus program in 2018 if inflation and growth persists in the Euro area. Also, CPI data from the Euro region came in line with market estimates at 1.4% for Dec’17.
EURINR is expected to appreciate in the coming session
* JPYINR trading range for the day is 57.32-57.95.
* JPY remained supported as the U.S. dollar slipped lower amid fears of a potential government shutdown.
* Japan’s consumer prices are expected to have posted a 12th straight month of gains in December.
* The Bank of Japan will keep its short-term interest rate at minus 0.1 percent and the 10-year government bond yield target at around zero percent.
* GBPINR trading range for the day is 88.45-89.09.
* GBP gained buoyed by a combination of broad dollar weakness and optimism that Britain will reach a favourable divorce deal with the EU.
* The dollar has also been pressured lower recently by concerns the global economic recovery will outpace U.S. growth and prompt other major central banks.
* British Prime Minister Theresa May offered France $62 million to bolster security at French border controls, part of measures to deepen cooperation.
GBP appreciated against the US dollar by 1.27 percent last week. Also, GBPINR depreciated by 1.51 percent during the same time period. UK inflation data for Dec’17 announced yesterday came in at 3% which was 0.1 percent lower than Nov’17 of 3.1 percent which helped in the strengthening of pound. However, retail sales came in at -1.5% which is lower than market estimates of -0.8 percent for Dec’17.
GBPINR is expected to move sideways in the coming session
Last week rupee depreciated by 0.26 percent despite dollar index weakening by 0.71 percent. India’s trade deficit widened to $14.88 billion in Dec’17 from $11.5 billion a year ago. This was on account of higher imports of crude oil and gold. However, the government decided to reduce its borrowing from Rs. 50,000 cr to Rs. 20,000 cr for the current fiscal year. Also, Indian equity market remained positive during the week with a surge of around 2.00 percent in Nifty Index.
The factors driving dollar index down were worries that Donald Trump may end NAFTA trade agreement with its counterparties. However, US building permits came in line with market estimates at 1.3million for Dec’17. Also, industrial production data from US came in at 0.9 percent against market expectations of 0.4 percent in Dec’17. Also, according to Federal Reserve Beige book data 12 districts reported their growth numbers out of which 11 districts reported modest gains.
USDINR is expected to move sideways in the coming sessionAFTER POST CONTENT
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