Mar 14 2019

Rupee Opens Lower On Oil, RBI Liquidity Infusion Via Forex Swaps

USD/INR – The Indian rupee opened lower against the dollar in wake of Brent crude’s climb to near its highest in four months. The Reserve Bank of India’s announcement that it will conduct Buy/Sell $5 billion USD/INR swaps to infuse liquidity may possibly further pressure the rupee. The rupee opened at 69.67 against the dollar compared to its previous close of 69.54. Meanwhile, Brent crude rose for the third straight day yesterday to close at its highest level since mid-November amid upbeat U.S. risk appetite amid falling U.S. inventories. The dollar index declined for the fourth straight day yesterday after benign U.S. wholesale price inflation data.

EUR/USD –EUR/USD traders have shrugged off the upside surprise to U.S. January durable goods data, which widened German-U.S. yield spreads and weighed down EUR/USD. Instead, they’ve fixated on the big upside surprise to euro zone January industrial production results, which suggest some growth stabilization. The U.S. durables data has not inspired dollar bulls as the data is unlikely to alter the Fed’s patient stance on rate hikes. The greenback is broadly offered despite small gains in short-term interest rates and U.S. Treasury yields. EUR/USD has rallied towards key resistance in the 1.1314/24 .The euro was steady at $1.1324 after advancing 0.3% overnight.

GBP/USD–    The greenback had taken a knock as the pound rallied more than 2% after British lawmakers voted against a potentially disorderly “no-deal” departure from the European Union late. Sterling was down 0.4% at $1.3258 after going as high as $1.3380 the previous day, its strongest since June 2018. British lawmakers on Wednesday rejected leaving the European Union without a deal in any scenario, paving the way for a vote to delay Brexit to seek a way out of the country’s worst political crisis in generations. British lawmakers are now widely expected to vote on Thursday to delay Britain’s departure from the EU, currently scheduled for March 29.

USD/JPY – The dollar was a shade higher at 111.50 yen after losing 0.2% the previous day. The U.S. currency has declined steadily from a 2-1/2-month peak of 112.135 marked early last week, with long-term Treasury yields having declined to their lowest level since the beginning of January. The Bank of Japan’s policy board begins a two-day meeting today, with an announcement expected around midday Friday, followed by Governor Kuroda’s press conference. The BOJ will likely emphasize the more fragile nature of the economy and its need to keep policy ultra-easy.  The JPY is likely to remain under pressure too but still highly influenced by moves in U.S. interest rates.

Currency Range for today

Currency Pair Lower Upper
USD/INR 69.45 69.95
EUR/INR 78.40 79.20
GBP/INR 91.80 92.60
JPY/INR 0.6215 0.6275

Important data releases today

Time Ccy Event Forecast Previous
7:30 PM USD New Home Sales (Jan) 622K 621K