Jun 15 2018

Rupee lower as ECB’s cautious policy approach lifts Dollar index

Financial Market Overview

15th June, 2018

Morning Coffee:-                                                                                  

MARKETS AT OPEN:-

Rupee:-

  • Indian rupee opened lower against the U.S. currency as the dollar index surged after the European Central Bank’s cautious policy approach caused a slump in the euro. A jump in U.S. retail sales also contributed to the broad dollar rally. Pair USDINR now at 67.93 against 67.62 previous close.
  • We expect the pair to tip in range between 67.70-68.00 today.

Indian Equities:-

  • Benchmark indices opened on a flat note amid mixed trade in Asia ahead of likely US tariffs on select Chinese goods.
  • The Sensex fell 12.28 points to 35,587.54 and the Nifty slipped 1.80 points to 10,806.20.

Global Markets:-

  • Asian markets are mixed today The Shanghai Composite is down 0.91%, the Hong Kong’s Hang Seng slightly falls 0.01% while the Australian ASX200 is trading higher by 1.26%.
  • European markets finished broadly higher yesterday with shares in Germany leading the region. The DAX is up 1.68% while France’s CAC 40 is up 1.39% and London’s FTSE 100 is up 0.81%.
  • The S&P 500 and Nasdaq closed higher on Thursday after the European Central Bank said it would avoid raising interest rates until mid-2019 and data showed U.S. economic strength. The Dow Jones Industrial Average fell 23.86 points, or 0.09 percent, to 25,177.34, the S&P 500 gained 6.97 points, or 0.25 percent, to 2,782.6 and the Nasdaq Composite added 65.34 points, or 0.85 percent, to 7,761.04.
  • The euro plunged from near 1.1800 to below 1.1600 against the dollar on Thursday after the ECB signaled that it will probably keep interest rates at the current level well into the next year, a longer period than what a section of investors expected. The common currency had briefly rallied to a one-month high after the ECB said it will end its bond-buying program by the end of this year.
  • The slump in the euro lifted the dollar by more than 1% on Thursday, its biggest single-day advance since December 2016. The euro, at near 60%, has more weightage on the dollar index than all other remaining currencies combined.
  • Meanwhile, data released showed that U.S. retail sales rose by 0.8% month-on-month in May, double of what economists had expected. The data for April was revised higher to show sales increased 0.4% instead of the previously reported 0.2%. There was more good news for the dollar on the economic front with jobless claims for the week ended June 9 falling to 218,000 as against the 224,000 reading expected by economists poll.