Jan 18 2019

Rupee Opened Flat Amid Divergent Reports On US-China Trade

USD/INR – The Indian opened little changed against the dollar, in line with other regional currencies, amid conflicting reports about U.S.-China trade relations. The rupee opened 71.0650 versus its previous close of 71.05. The key negatives for the rupee are in the form of Brent crude oil at above $60 per barrel and foreign outflows from federal bonds and equities, while recent dovish Federal Reserve comments are positive. Dollar index little changed at 96.04. Brent crude oil contract 0.8% higher at $61.68 per barrel.

EUR/USD – The U.S. dollar rose on Thursday against a euro dragged lower by soft economic data, while the pound took off on hopes of a second referendum on Britain’s membership in the European Union. Against the euro, the dollar strengthened to $1.1367, its highest in nearly two weeks. Inflation data for the trade bloc showed price pressures receding further from the central bank’s target, complicating the situation for the European Central Bank which currently expects to raise interest rates later this year.  The single currency has fallen 0.80 percent against the dollar since Tuesday morning, when Germany reported its economy grew by 1.5 percent in 2018, the weakest rate of expansion in five years. The euro’s weakness comes at a time when the dollar itself has struggled to gain momentum. On Jan. 10, the dollar almost fell below its 200-day moving average when the index touched a three-month low of 95.029. Since then it has rebounded but is still down about 0.07 percent so far this month. EUR/USD was last trading at 1.1395.

 

GBP/USD – The British pound rose to a two-month high against the euro extending recent gains on growing expectations Britain can avoid a no-deal withdrawal from the European Union. Talk of a second referendum vote in the UK sparked a rally in afternoon trade which further lifted the currency. Prime Minister Theresa May has been meeting lawmakers from all parties in an attempt to find a way out of an impasse over how Britain should leave the EU, after May’s own plan was resoundingly rejected by parliament on Tuesday. While she has repeatedly rejected a second referendum, a vocal campaign in favor of holding a new vote has the support of some lawmakers. The pound also firmed toward a two-month high against the dollar. It was trading 0.77 percent up at $1.298, its highest since Nov. 15. GBP/USD was last trading at 1.2973.

 

USD/JPY – The dollar was firm against the yen on Friday as growing optimism on progress in Sino-U.S. trade talks supported broader appetite for risk. A Wall Street Journal report on Thursday that U.S. Treasury Secretary Steven Mnuchin had considered easing tariff imposed on Chinese imports lifted sentiment though a Treasury spokesman later denied the report. Against the yen, the dollar edged up to 109.31 yen for its fourth-day of gains against the Japanese currency and just off a two-week high of 109.40 touched overnight.

Currency range for today

Currency Upper Lower
USD/INR 70.90 71.40
EUR/INR 80.75 81.45
GBP/INR 91.90 92.60
JPY/INR 0.6480 0.6540

Important data releases on 18-01-2019

Date Time Curr Event Actual Forecast Previous
18-Jan 3:00 PM GBP/INR Retail Sales (MoM) (Dec)  – -0.8% 1.4%
18-Jan 5:00 PM INR Bank Loan Growth  – 15.1%
18-Jan 5:00 PM INR Deposit Growth  – 9.2%
18-Jan 5:00 PM INR FX Reserves, USD  – 396.08B