Feb 01 2019

Rupee Opened Little Changed Ahead Of Budget; Fiscal Estimates Eyed

USD/INR – The Indian rupee opened little changed against the dollar ahead of the India’s interim budget. The fiscal deficit data and the reaction of local equities will be closely watched by currency traders. The rupee opened at 71.10 versus the dollar compared with its previous close of 71.0750. Later today, Minister Piyush Goyal will present the interim budget for the next financial year that begins on April 1, amid expectations of a package for the farm sector before federal elections due by May. Focus for Asian currencies will be on the U.S. jobs data due later today, and the U.S.-China trade talks. President Donald Trump said on Twitter that meetings between U.S. and Chinese officials are going very well and all of the many problems will be hopefully resolved.

EUR/USD – The euro was flat at $1.1445 after having fallen 0.3% in the last session. The single currency has not managed to gain despite broader dollar weakness as growth and inflation in the euro zone remain weaker than expected. Indeed, Jens Weidmann, the Bundesbank president and a member of the European Central Bank Governing Council, painted a bleak picture of the German economy on Thursday, saying the slump in Europe’s largest economy will last longer than initially thought. Weidmann also said the euro zone is likely to undershoot its inflation projection this year due to lower oil prices and the ECB should look through this dip and not waste time unnecessarily in normalizing policy.

GBP/USD – Sterling, which is grappling with troubles of its own on uncertainty over a deal to avoid a chaotic British exit from the European Union, was flat at $1.3105. Analysts expect the British pound to remain volatile in the coming weeks. With less than two months to go before Brexit, investors are trying to figure out whether May’s Conservative Party rallying around her has increased the chances of her securing concessions from the EU or has pushed Britain toward further deadlock and uncertainty. Foreign minister Jeremy Hunt said that Britain will take a few days to formulate proposals to put to the European Union in an attempt to resolve the issue of Irish border arrangements after Brexit.

USD/JPY – The yen was steady at 108.90 after hitting a two-week high in the previous session, pressured by the Federal Reserve’s cautious outlook on the U.S. economy, which suggested that the central bank is near the end of its tightening cycle. In the United States, the Fed’s dovish stance in its policy statement on Wednesday after the close of a two-day meeting took the market by surprise even though the Fed has been preaching patience and balance sheet flexibility for some time. Analysts said the statement seemed as if the Fed did a turnaround from its previous generally upbeat economic stance.

Currency Range for today

Currency Pair Upper Lower
USD/INR 70.80 71.40
EUR/INR 81.00 81.90
GBP/INR 92.65 93.55
JPY/INR 0.6500 0.6560

Important data releases today

Date Time Currency Event Forecast Previous
1-Feb-19 2:25 PM EUR German Manufacturing PMI (Jan) 49.9 49.9
1-Feb-19 3:00 PM GBP Manufacturing PMI (Jan) 53.5 54.2
1-Feb-19 7:00 PM USD Nonfarm payrolls (Jan) 165K 312K
1-Feb-19 7:00 PM USD Unemployment Rate (Jan) 3.9% 3.9%
1-Feb-19 8:30 PM USD ISM manufacturing PMI (Jan) 54.2 54.3