* USDINR trading range for the day is 64.67-65.5.
* Rupee post its biggest intraday day gains in 10-weeks on likely foreign portfolio investors’ fund inflows into local stocks.
* Minutes from the Reserve Bank of India’s meeting this month showed monetary policy committee members expressing concerns about accelerating inflation.
* The MPC voted 5-1 at the meeting to keep the policy rate on hold at 6.0 percent and to retain its “neutral” monetary policy stance.
Last week rupee depreciated by 0.9 percent as dollar index strengthened by 0.85 percent. In the latest RBI policy meeting minutes the panel was concerned about rising inflation on account of increase in HRA in various states and fiscal slippage indicated in the union budget. Also, Indian equity market remained positive with a surge of 0.36 percent in the nifty index during the week.
In the latest FOMC minutes the committee felt that inflation would rise in 2018 and stabilise in the medium term. They also felt that the recent strengthening of the economy increases the likelihood of rate hike. US treasury yields had started to rise during the week helping US dollar to strengthen. Also, the US government raised $258 billion from treasury securities of various maturities. The cost of borrowing was highest since 2008. NSE USDINR March as seen in the weekly chart above has opened the week with gap up at 64.7875 levels and at the starting of the week price made a weekly low of 64.68 levels. Later on as expected prices could not able to sustain on lower levels and rallied sharply and made a weekly high of 65.35 levels. This week prices have closed above the previous week’s closing of 64.29 levels and finally closed 0.71% higher at 64.9675 levels. Technically, prices have formed “Bullish candlestick pattern” which indicates further strength.
For the next week we expect USDINR prices to find support in the range of 64.80 –64.70 levels. Trading consistently below 64.70 levels would lead towards the strong support at 64.40 levels and then finally towards the major support at 64.10 levels.
Resistance is now observed in the range of 65.30 – 65.40 levels. Trading consistently above 65.40 levels would lead towards the strong resistance at 65.70 levels, and then finally towards the major resistance at 65.90 levels.
The coming week the movement in USDINR would be driven by consumer confidence data, core durable goods, manufacturing PMI and GDP data from US and GDP and IIP data from India.
USDINR is expected to move sideways in the coming session
NSE USDINR trading levels for the week
Trend : Up
S1 – 64.80 R1 – 65.30
S2 – 64.40 R2 – 65.70
Weekly Recommendation : Buy NSE USDINR March between 64.80 – 64.70, SL – 64.40, Target – 65.30 / 65.40
* EURINR trading range for the day is 79.62-80.55.
* Euro remained in range as the dollar edged up as global investors gingerly dipped their toes back into riskier assets amid rapidly shifting views on U.S. monetary policy.
* ECB minutes: pace of economic expansion could strengthen, growth robust
* ECB minutes: increasingly confident about inflation but patience required
EURUSD depreciated by 0.7 percent while EURINR depreciated by 0.16 percent during the same time frame.
In the latest ECB meeting minutes the policy committee mentioned that they could revisit the policy early this year. Manufacturing PMI from Euro zone came in at 58.5 against market expectations of 59.2 in Jan’18. Also, Euro zone services PMI came in at 56.7 against market expectations of 57.7 in Jan’18.
EURINR is expected to move sideways in the coming session
* GBPINR trading range for the day is 90.15-91.29.
* GBP traded in range as renewed concerns over the state of play in Brexit negotiations checked the British currency’s gains.
* A shift in market expectations of the BOE’s policy stance has offered some support to the pound in recent sessions.
* Bank of England’s chief economist Andy Haldane said the risks to the BoE’s latest projections, for both UK demand and inflation, were to the upside.
GBP depreciated against the US dollar by 0.45 percent last week while GBPINR depreciated by 0.44 percent during the same time period.
The second GDP estimate for UK came in at 0.4% for Q42017 against market expectations of 0.5%. BOE governor signals hawkish stance on interest rates in the inflation hearing report. The governor believed that growth will be rising as well as inflation would be rising giving chances for rate hikes. Also a popular investment bank had upgraded their forecast for British pound against USD.
GBPINR is expected to move sideways in the coming session
* JPYINR trading range for the day is 60.65-61.11.
* JPY traded in the range as the dollar continued after the minutes of the Federal Reserve’s latest policy meeting.
* BOJ should consider buying foreign bonds as part of efforts to reflate the economy during Governor Haruhiko Kuroda’s second term at the central bank helm.
* Producer prices in Japan were up 0.7 percent on year in January, the Bank of Japan said.AFTER POST CONTENT
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