Rupee Opened Higher As Sliding Crude Offsets Rise In Dollar Index

Rupee Opened Higher As Sliding Crude Offsets Rise In Dollar Index

8 Feb 2019   9:20 AM
 

USD/INR – The Indian rupee opened higher against the dollar after Brent crude oil suffered its biggest decline in one-and-a-half weeks, offsetting a further rise in the dollar index. The rupee opened at 71.37 to a dollar versus its previous close of 71.45. With the dollar continuing to march higher against major currencies and considering renewed doubts over the U.S.-China trade deal, interbank might prefer to be neutral or attempt long-dollar positions. Meanwhile, U.S.-China trade worries were back in focus after President Donald Trump said yesterday that he did not plan to meet Chinese leader Xi Jinping before the March 1 deadline, when the current temporary trade truce between the two nation ends.

EUR/USD – The euro was marginally lower at $1.1338, on track to post its fifth straight day of losses. The single currency has been stumbling due to weaker-than-expected growth data out of the eurozone and expectations that the European Central Bank will keep monetary policy accommodative this year. The U.S. dollar rose against the euro on Thursday amid growing worries about the deteriorating growth outlook for the euro zone area. The European Commission sharply cut its forecasts for euro zone economic growth this year and next because it expects the bloc's largest countries to be held back by global trade tensions and domestic challenges. It dropped earlier in the session after German industrial output unexpectedly fell in December. Global trade tensions and growing public debt are hastening a slowdown in the largest countries of the bloc, complicating the European Central Bank's plans for an interest rate hike this year and weakening the single currency.

GBP/USD – Sterling was marginally lower at $1.2950. Having fallen more than half a percent immediately after Bank cut its growth forecast and left interest rates unchanged, the pound subsequently recouped its losses and strengthened on hopes that Britain will make some progress in coming days in negotiations on its departure from the European Union. The speed at which the British currency retraced its losses suggested investors are focused more on Brexit talks than on the economic outlook. At a time when other major central banks have said they will hold off from raising borrowing costs, the BoE stuck to its message that interest rates will rise if an EU divorce deal is done. But what underpinned the British currency, according to some market analysts, was the promise of more stimulus measures in case Britain fails to pull together a deal by March 29.

USD/JPY - The yen was flat in early Asian trade at 109.75. Analysts think Japanese demand for foreign bonds has supported dollar/yen. Japanese Ministry of Finance investor flow data for December show interesting deviations from trend, reflecting the quest for yield against a backdrop of slowing global economic growth. The U.S. remains the destination of choice for Japanese investors with good buying of both Treasuries and corporates. This probably continued into January following December, with safe-haven considerations likely playing a prominent role, as did higher yields relative to other major currencies.

Currency Range for today

Currency Pair Lower Upper
USD/INR 71.20 71.70
EUR/INR 80.50 81.30
GBP/INR 91.90 92.70
JPY/INR 0.6470 0.6530 

No Important data releases today

 


Date : 8-Feb-2019