Mar 01 2019

Rupee Opens Flat Despite Upbeat US Data

USD/INR – The Indian rupee opened little changed against the U.S. dollar despite U.S. upbeat data released yesterday that showed the world’s largest economy grew at a faster-than-expected clip in the October-December quarter, lifting Treasury yields. The rupee opened at 70.74 against the dollar compared with its previous close of 70.72. The dollar was trading higher against most regional currencies on Friday after the U.S. economy recorded an annual growth rate of 2.6% in the final three months of 2018. While that was slower than the 3.4% growth in the prior quarter, the expansion was faster than the 2.3% reading expected. Meanwhile, data released after markets closed yesterday showed India’s economy grew 6.6% in the December quarter, lower than the 6.9% expected.

EUR/USD – The euro was steady at $1.1370, having slid from a three-week peak of $1.1420 scaled the previous day. EUR/USD has retreated from the three-week high it set earlier in the session after upside surprises to U.S. data left bulls doubting themselves. The big upside surprise to French January consumer and as-expected year-on-year German and Spanish inflation suggest some stabilization in the euro zone economy. Those data points, in addition to last week’s upside surprise to February euro zone PMI, helped lift EUR/USD to its 1.1420 high as the market could be seeing signs of growth stabilizing. The bullish effects were offset by a double dose of upbeat U.S. data.

GBP/USD– The pound edged lower after this week’s run as investors booked profits and assessed the continued uncertainty about when Britain will exit the European Union and on what terms.  Sterling has surged to multi-month highs this week after Prime Minister Theresa May said lawmakers would get the chance to vote on a delay to Brexit if they choose not to back her Brexit withdrawal agreement. That has encouraged traders to slash their forecasts for a no-deal Brexit and instead expect a delay beyond the official March 29 departure date. The opposition Labour party said this week it would support a new referendum on Brexit after parliament defeated its alternative plan for leaving the EU. GBP/USD was last trading at $1.3265.

USD/JPY The dollar hovered near a 10-week high against the yen on Friday, thanks to a surge in Treasury yields after U.S. gross domestic product data topped expectations. The greenback was higher at 111.75 yen. The dollar suffered brief dips against the yen, a perceived safe-haven, this week as tensions between India and Pakistan flared and as a summit between U.S. President Donald Trump and North Korean leader Kim Jong Un ended without an agreement. But the U.S. currency was on track for a 0.7% weekly gain against its Japanese peer.

Currency Range for today

Currency Pair Lower Upper
USD/INR 70.65 71.15
EUR/INR 80.20 81.00
GBP/INR 93.60 94.40
JPY/INR 0.63250.6385

Important data releases today

Time Ccy Event Forecast Previous
10:30 AM INR Nikkei Markit Manufacturing PMI (Feb) 53.5 53.9
2:25 PM EUR German Manufacturing PMI (Feb) 47.6 47.6
2:25 PM EUR German Unemployment Change (Feb) -5K -2K
3:00 PM GBP Manufacturing PMI (Feb) 52.0 52.8
3:30 PM EUR CPI (YoY) (Feb) 1.5% 1.4%
8:30 PM USD ISM Manufacturing PMI (Feb) 55.5 56.6