Jul 05 2018

Rupee Under pressure as Asian Currencies Struggle before Fed Minutes

Financial Market Overview

05th July, 2018

Morning Coffee:-                                                                                  

MARKETS AT OPEN:-

Rupee:-

  • USD/INR opens higher amid dollar’s advance against most regional currencies before Fed June meeting minutes. Pair now at 68.83 against 68.74 previous close.
  • We expect the pair to tip in range between 68.60-68.90 today.

Indian Equities:-

  • Benchmark indices are trading flat in opening trade amid weak Asian markets.
  • The Sensex down 4.94 points at 35640.46, and the Nifty down 1.10 points at 10768.80.
  • Reliance Industries gained more than 1 percent ahead of 41 AGM scheduled to be held today.

Global Markets:-

  • Asian markets are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 0.15% while the Hang Seng is down 0.68%. The Shanghai Composite is not trading.
  • European markets finished mixed as of the most recent closing prices. The CAC 40 gained 0.07%, while the FTSE 100 led the DAX lower. They fell 0.27% and 0.26% respectively.
  • S. financial markets were closed on Wednesday, July 4, in observance of Independence Day.
  • Major currencies were on tenterhooks on Thursday on the eve of Washington’s deadline to impose tariffs on Chinese imports while the yuan held steady after the central bank this week sought to stem its recent tumble.
  • The offshore yuan fetched 6.6478 per dollar. Chinese authorities have been clear they don’t want to use the weaker yuan as a major foreign exchange trade policy, if they were to target a weaker yuan, it could potentially lead to problems, such as capital outflows experienced back in 2015.
  • The index of the U.S. dollar against six other major rivals was at 94.511, having slipped to 94.397 on Wednesday, its lowest level in over a week.
  • Fed minutes may provide cues whether current trade disputes and falling US bond term premiums have made policymakers rethink on path of monetary tightening. At last meeting, Fed indicated it could hike two more times this year.