Yesterday rupee depreciated by 0.23 as dollar index strengthened by 0.35 percent as India’s trade deficit widened to $13.7 billion in Mar’18 from $11.98 billion in Feb’18. The US Treasury Department added India to its watch list of countries with potentially questionable foreign exchange policies, joining China and four others which impacted the sentiments of forex traders. However, India’s WPI came in at 2.47% for Mar’18 against 2.48% of Feb’18.
Earlier during the weekend US and its allies had launched missiles on Chemical weapons facilities in Syria rising geo political tensions but later on Donald Trump tweeted that it’s just one of strikes and mission has been accomplished. Building permits data from US came in line with market expectations at 1.35 million for Mar’18. According to FED reports US economic growth on track despite tariff concerns. Philly Fed Manufacturing index came in at 23.2 for Apr’18 against market expectations of 20.8.
* USDINR trading range for the day is 65.68-65.93.
* Rupee depreciated seven-month low, weighed by uptick in Brent crude oil prices amid likely FII selling of local debt.
* Meanwhile, dollar demand strengthened on optimism over US economic outlook and expectation of an earlier Fed rate hike.
* Recent spurt in Brent prices have triggered fear that the RBI-MPC may turn cautious by revising inflation projection on the higher side.
EURUSD depreciated by 0.23 percent while EURINR depreciated by 0.33 percent during the same time frame. ECB Council member Nowotny mentioned that the bond buyback program will wound down by the down of this year. German CPI came in line with market expectations at 0.4% for Mar’18. German ZEW economic sentiment data came in at -8.2 against market expectations of -0.8. Euro zone CPI came in at 1.3% against market expectations of 1.4% for Mar’18.
* EURINR trading range for the day is 81.15-81.68.
* Euro under pressure as dollar seen supported by higher long-term U.S. Treasury yields on improving investor appetite for risk assets.
* Inflation in the 19 countries sharing the euro currency rose in March by less than previously estimated, European statistics office Eurostat said.
* Eurozone construction output fell for the second straight month in February, Eurostat reported.
GBP depreciated against the US dollar by 0.78 percent while GBPINR appreciated by 0.53 percent. Prime Minister Theresa May had been addressing the UK parliament after joining France and US in airstrikes against Syria on chemical weapon plant in Douma. Average earnings came in at 2.8% for Mar’18 against market expectations of 3%. UK CPI for Mar’18 came in at 2.5% against market expectations of 2.7%. Retail sales data from UK came in at -1.2% against market expectations of -0.5%.
* GBPINR trading range for the day is 92.99-93.99.
* GBP remained under pressure after British inflation cooled unexpectedly.
* Official data showed annual consumer price inflation fell to 2.5 percent in March, down from 2.7 percent in February and below expectations.
* UK inflation slowed to a one year-low in March, diminishing scope for a rate hike in May as markets widely expect.
JPYINR opened on flat note and traded with less movement on Thursday. On the daily chart, price has been consolidating near the upper line of Bollinger formation as well as 21 days SMA; which could be a immediate hurdle for the pair. Moreover, momentum indicator RSI and MACD has indicated sideways range with negative crossover. So based on the above technical structure and indicator, we expect bearish movement in JPYINR towards 60.90 levels.
* JPYINR trading range for the day is 61.14-61.4.
* JPY showed little response to the U.S.-Japan summit, at which Trump and Japanese PM Abe agreed to intensify trade consultations between the two longtime allies.
* BOJ offers to buy 125 bln yen in corporate bond (CB) from 4/25
* BOJ offers to supply 800 bln yen in funds at a fixed rate for 4/23 – 5/7 at all offices.
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