Last Updated on: 02/12/2024
TODAY: Monday, 02 December, 2024
USD/INR :
The Indian Rupee (INR) remains under some selling pressure on Monday after reaching an all-time low in the previous session. Donald Trump's victory in the US Presidential election sparked a wave of Greenback strength and dragged the INR lower. Additionally, the weaker-than-expected Gross Domestic Product (GDP) data for the July-September quarter could spark fresh outflows from stocks, weighing on the local currency. Donald Trump threatened 100% tariffs on BRICS nations, including India, if they went ahead with developing their common currency to replace the USD. Meanwhile, India has been cautious in its ambitious move to de-dollarise even as the United States recently became India's leading trading partner. Investors await the HSBC India Manufacturing Purchasing Managers' Index (PMI) for November, which is estimated to ease to 57.3 from 57.5 in October. On Friday, the Reserve Bank of India (RBI) interest rate decision will be in the spotlight. Goldman Sachs analysts expect the Indian central bank to maintain the repo rate and policy stance unchanged but sound cautious on food inflation and acknowledge the moderation in growth. On the US docket, the ISM Manufacturing PMI will be released later on Monday.
MAJOR WORLD CURRENCIES:
USD:
The dollar crept higher on Monday in what is shaping up to be a critical week for the prospect of U.S. rate cuts, while the yen's recent rebound was underpinned by wagers on rising rates at home.
The dollar also drew some verbal support from U.S. President-elect Donald Trump who on Saturday demanded that BRICS member countries commit to not creating a new currency or supporting another currency that could replace the dollar or face 100% tariffs.
Political uncertainty in France added to pressure on the euro which slipped 0.4% to $1.0532, after bouncing 1.5% last week and away from a one-year trough of $1.0425.
That saw the dollar index edge up to 106.170, having closed out November with a gain of 1.8% even after a setback last week.
"Given the continued resilience of the U.S. economy and a worsening outlook elsewhere, we don't think this is the start of a deeper setback for the dollar," said Jonas Goltermann, deputy chief markets economist at Capital Economics.
"But the bar for a further shift in expected interest rates in favour of the U.S. in the near term is quite high," he added. "A period of consolidation into year-end looks to us like the most likely scenario, although the risks remain skewed in favour of the dollar over the course of 2025."
Key to the outlook for rates will be the November payrolls report due Friday where median forecasts favour a rise of 195,000 following October's weather and strike-hit report, which could also be revised given a low response rate for that survey.
GBP/USD:
The GBP/USD pair attracts some sellers on the first day of a new week and reverses a major part of Friday's positive move to mid-1.2700s, or a nearly three-week high. The intraday slide drags spot prices back below the 1.2700 mark in the last hour and is sponsored by a goodish pickup in the US Dollar (USD) demand.
Against the backdrop of persistent geopolitical risks, worries about the second wave of trade war after US President-elect Donald Trump takes office in January drive some haven flows towards the Greenback and exert some pressure on the GBP/USD pair. In fact, Trump threatened a 100% tariff on the so-called 'BRICS' nations – Brazil, Russia, India, China, and South Africa – if they replace the USD with another currency for international transactions.
EUR/USD:
The EUR/USD pair faces some selling pressure to around 1.0530 amid the firmer US Dollar (USD) during the early Asian trading hours on Monday. Investors will closely monitor the speech by the European Central Bank’s (ECB) President Christine Lagarde and the release of the US ISM Manufacturing Purchasing Managers' Index (PMI), which is due later on Monday. Inflation in the Eurozone, as measured by the Harmonized Index of Consumer Prices (HICP), rose to 2.3% YoY in November from 2.0% in October, in line with market expectations. This figure overreached the ECB 2.0% target. Meanwhile, the Core HICP climbed by 2.8% YoY in November, compared to 2.7% in the previous reading, which was also in line with expectations. Market participants have fully priced in a 25 basis points (bps) rate cut from the ECB in December, which would signify the bank’s fourth rate reduction this year. However, expectations of a substantial 50 bps reduction have been dwindling since last month, with slight enhancements in the Eurozone’s tepid growth forecast. The expectation that the ECB will cut interest rates at their December meeting exerts some selling pressure on the Euro (EUR).
Gold :
USD traders take account of US President-elect Donald Trump's weekend warning against the so-called 'BRICS' nations, threatening 100% tariffs on Brazil, Russia, India, China and South Africa if they create a new currency or support another currency that would replace the Greenback.
Amid mounting fears of a global tariff war, the optimism over robust Chinese Manufacturing PMI data wanes, unable to support Gold price. China is the world’s biggest Gold consumer.
However, the downside appears cushioned in Gold price amid sustained bets for a 25 basis points (bps) interest rate cut by the US Federal Reserve (Fed) this month. Markets price in about a 65% chance of a December Fed rate reduction, the CME Group’s FedWatch Tool showed early Monday.
Markets also remain wary of the ongoing geopolitical tensions between Russia and Ukraine while digesting the insurgent activity by Jihadist-led rebels in the Syrian city of Aleppo on Friday night. This occurred after a rapid offensive launched Wednesday, coinciding with a ceasefire in neighbouring Lebanon. Russia, a key ally of the Syrian government, responded with its first airstrikes on Aleppo since 2016.
USD/INR as on 29th November , 2024
Currency
OPEN
HIGH
LOW
CLOSE
USD/INR
84.4800
84.5050
84.4825
Forward premium (%) as on 29th November , 2024
Periods
1 Month
3 Month
6 Month
12 Month
Premium
1.74/1.88
1.92/1.97
2.15/2.17
2.23/2.25
USD/INR Cash/Tom/Spot Levels: (in Paisa)
(Updated as on 02nd December, 2024 @ 09.00am)
Cash/Tom: 0.45/2.55 Cash/Spot: 0.60/3.40
Tom/Spot: 0.15/0.85 Spot/Next: 0.15/0.85
Cash Date: 02.12.2024
Tom Date: 03.12.2024
Spot Date: 04.12.2024
Outlook for the day 02nd December, 2024: Rupee expected to trade in range of 84.42-84.68.
MAJOR WORLD CURRENCIES: as on (29th November , 2024)
CURRENCY
GBP
1.2683
1.2749
1.2669
1.2737
EUR
1.0553
1.0597
1.0540
1.0575
AUD
0.6498
0.6527
0.6491
0.6510
JPY
151.54
151.55
149.46
149.75
CHF
0.8827
0.8832
0.8793
0.8809
XAU
2641.12
2666.12
2633.99
2653.54
Foreign Currencies
Updated: 17:30 hrs. (12:00 GMT) on 29th November , 2024
USD/INR: 84.4875 [FXIR]
Against
USD
INR
1 EUR =
1.0563
89.2441
1 GBP =
1.2697
107.2738
100 JPY =
150.03
56.3137
1 AUD =
0.6507
54.9760
1 CHF =
0.8814
95.8560
Precious Metals
Updated: 17:30 hrs. (12:00 GMT) as on 29th November , 2024
Gold ($/oz)
2651.05
Silver ($/oz)
30.70
Stock Indices
Index Close
28th November
29th November
BSE Sensex
79043.74
79802.79
NSE Nifty
23914.15
24131.10
Dow Jones
44722.06
44910.65
NASDAQ
19060.48
19218.17
Major Economic Data Releases for the Day 02.12.2024
Date
Region
Time (IST)
Description
02.12.24
08.15 PM
Final Manufacturing PMI
BOJ Policy Rate
08.30 PM
ISM Manufacturing PMI
ISM Manufacturing Prices
The views contained herein are those of individuals and not necessarily those of the Bank. This is for information purpose only and no recommendations are intended. While due care has been taken in preparation of this communication, IOB cannot be held responsible for any consequences of any decisions based on this information. Comments/Suggestions may be freely emailed to feddeal@iobnet.co.in