Last Updated on: 06/05/2024
TODAY: Monday, 06th May, 2024
USD/INR:
INR likely to open around 83.35/40
Dollar is tentative after Friday’s weaker-than-expected US jobs data brought back rate cut hopes into the radar. US equites had a strong rally across indices on Friday and Asia has opened positively today. Dollar Index is at 105.05, with EUR at 1.0770 and GBP at 1.2555. JPY pared some of the intervention gains and USDJPY is trading at 153.65. The US 10y is lower, at 4.5%.
US jobs report indicated that 173k jobs were added last month against an expected 243k. The previous month’s estimate was revised higher by 10k though. Unemployment rate came in slightly higher than expected, and wage growth came off to 3.9% from 4.1% previously. While the report, per se, does not indicate a weak labor market, the fact that there were no hawkish surprises and that this report has bucked the recent trend of data outperforming expectations is encouraging to markets.
Now that markets are now more hopeful of rate cuts, the Dollar could trade subdued and sideways until the US CPI data. USDINR could again be down to the 83.30 and below levels as the pressure, on the Rupee, both due to JPY and due to strong Dollar, eases.
MAJOR WORLD CURRENCIES:
USD:
The dollar fell to a three-week low against the yen on Friday after data showed U.S. jobs growth slowed more than expected in April and annual wage gains cooled, boosting bets that the Federal Reserve will cut rates twice this year.
Employers added 175,000 jobs last month, below economists' expectations for a 243,000 increase. Wages increased 3.9% in the 12 months through April, below expectations for a 4.0% gain after rising 4.1% in March.
The unemployment rate rose to 3.9% from 3.8%, remaining below 4% for the 27th straight month.
The Fed said after its two-day meeting on Wednesday that sticky inflation meant that it would take longer to cut rates.
Inflation should continue to decline even as the U.S. central bank holds its benchmark interest rate at current levels, Fed Governor Michelle Bowman said on Friday while reiterating her willingness to raise the policy rate if progress peters out or reverses.
The jobs report showed "solid" growth that slowed to a point that could make Fed officials more confident the economy is not overheating, Chicago Fed President Austan Goolsbee said on Friday.
Other data on Friday showed the U.S. services sector contracted in March, while a measure of prices paid by businesses for inputs jumped, a worrisome sign for the inflation outlook.
The dollar index was last down 0.27% at 105.03 after reaching 104.52, the lowest since April 10. The euro gained 0.39% to $1.0766.
The greenback weakened 0.48% to 152.9 Japanese yen, reaching as low as 151.86, the weakest since April 10.
GBP:
GBP/USD continues its winning streak for the fourth consecutive day, trading around 1.2550 during the Asian trading hours on Monday. The appreciation of the pair could be attributed to the recalibrated expectations for the Fed's interest rate cuts in 2024 following the release of lower-than-expected US jobs data.
Following the bearish action seen in the first half of the day on Thursday, GBP/USD turned north and registered small daily gains. The pair preserves its recovery momentum early Friday and trades in positive territory slightly above 1.2550.
Wall Street's main indexes opened in the green and continued to push higher on Thursday. The US Dollar (USD) continued to lose interest in the risk-averse market atmosphere and helped GBP/USD gain traction.
Later in the session, the US Bureau of Labor Statistics will release the April jobs report. Nonfarm Payrolls (NFP) are forecast to rise 238,000 after the 303,000 increase registered in March. The immediate market reaction could be straightforward, with a strong reading above 250,000 providing a boost to the USD and a disappointing reading at or below 150,000 triggering another USD selloff.
If the NFP arrives near the market consensus, markets could react to revisions. In case revisions are not significant enough, the wage inflation component could drive the USD's valuation.
Average Hourly Earnings are forecast to rise 0.3% on a monthly basis in April. A print at or above 0.5% could revive fears over wage inflation feeding into consumer inflation and help the USD rebound heading into the weekend.
EUR:
EUR/USD trades in positive territory for the fourth consecutive day near 1.0765 during the early Monday. The softer US Dollar provides some support to the major pair. Traders await the HCOB Purchasing Managers’ Index (PMI) data from Germany and the Eurozone, along with the Eurozone PPI.
EUR/USD fluctuates in a tight channel slightly above 1.0750 early Monday after closing the previous week in positive territory. The technical picture suggests that the pair could stay bullish in the near term.
The disappointing data releases from the US caused the US Dollar (USD) to weaken against its rivals on Friday and helped EUR/USD stretch higher ahead of the weekend.
Nonfarm Payrolls (NFP) in the US rose 175,000 in April, the Bureau of Labor Statistics reported. This reading fell short of the market expectation of 243,000. Additionally, the Unemployment Rate edged higher to 3.9% from 3.8%. Meanwhile, the ISM Services PMI dropped to 49.4 in April from 51.4 in March, pointing to a contraction in the service sector's business activity.
Eurostat will publish Producer Price Index (PPI) data for March later in the session, which is unlikely to trigger a noticeable market reaction. The US economic docket will not offer any high-tier data releases.
Investors will pay close attention to comments from Federal Reserve (Fed) officials. Federal Reserve Bank of Chicago President Austan Goolsbee told Bloomberg TV on Friday that employment numbers were solid. Fed Board of Governors member Michelle W. Bowman noted that there were upside risks to inflation outlook and added that she was open to raising rates if data showed a stall or a reversal in inflation progress.
In case Fed policymakers deliver hawkish remarks, the USD could stage a rebound and weigh on EUR/USD.
In the meantime, US stock index futures were last seen trading mixed on the day. A bullish opening in Wall Street could make it difficult for the USD to find demand in the American session.
Gold
Gold price snaps the two-day losing streak during the Asian session on Monday. The weaker-than-expected US employment reports have boosted the odds of a September rate cut from the US Federal Reserve. This, in turn, has dragged the US Dollar lower and lifted the USD-denominated gold.
Financial markets struggle for direction on Thursday, with XAU/USD hovering around the $2,300 mark. The US Dollar traded throughout the day on sentiment, advancing with optimism while falling when things soured. In a broader view, however, little has changed across the board throughout the week, as the Federal Reserve (Fed) failed to deliver a clear message. The central bank announced on Wednesday that it would slow the pace of decline in its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion starting in June. Interest rates have been left unchanged, as expected.
The Fed was hawkish but not as hawkish as feared. Indeed, Chairman Jerome Powell dropped some dovish comments in the middle of his press conference. Inflation is still the main issue, but not the only one. Price pressures intensified in the first quarter of the year, while other macroeconomic data indicated economic progress slowed. Still, Powell repeated that decisions will be made meeting by meeting and clarified that it is unlikely the next policy move will be a hike. He added that cutting rates is an option if inflation resumes its fall but also if there is weakness in the labor market, uplifting the relevance of employment-related figures ahead of the next Fed decision.
Data released these days showed the labor market remains tight. The ADP survey indicated that the private sector added 192K new positions in April while the number of job openings remained little changed at 8.5 million on the last business day of March, according to the JOLTS Job Openings report. Furthermore, the US reported Unit Labor Costs in the first quarter of the year rose 4.7%, implying an upward risk to inflaiton, while Nonfarm Productivity in the same quarter advanced a measly 0.3%.
Another indicator of labor sector performance will be the April Nonfarm Payrolls report, which will be out on Friday. The US is expected to have added 243K, while the Unemployment Rate is foreseen steady at 3.8%. The report includes an update on wages, while separately, the US will release the April ISM Services PMI, an indicator of economic health.
USD/INR as on 03rd May, 2024
Currency
OPEN
HIGH
LOW
CLOSE
USD/INR
83.39
83.4425
83.34
83.4225
Forward premium (%) as on 03rd May , 2024
Periods
1 Month
3 Month
6 Month
12 Month
Premium
1.13/1.27
1.25/1.30
1.37/1.40
1.67/1.68
USD/INR Cash/Tom/Spot Levels: (in Paisa)
(Updated as on 06th May 2024, @ 09.00am)
Cash/Tom: 0.20/0.70 Cash/Spot: 0.40/1.40
Tom/Spot: 0.20/0.70 Spot/Next: 0.20/0.70
Cash Date: 06th May 2024
Tom Date: 07th May 2024
Spot Date: 08th May 2024
Outlook for the day 06th May 2024
Rupee expected to trade in range of 83.30-83.60
MAJOR WORLD CURRENCIES: as on (03rd May, 2024)
CURRENCY
GBP
1.2533
1.2633
1.2519
1.2544
EUR
1.0725
1.0812
1.0722
1.0758
AUD
0.6562
0.6647
0.6560
0.6608
JPY
153.64
153.78
151.85
152.98
CHF
0.9101
0.9107
0.9005
0.9054
XAU
2302.82
2320.78
2277.19
2301.55
Foreign Currencies
Updated: 17:30 hrs. (12:00 GMT) on 03rd May , 2024
USD/INR: 83.4275FXIR]
Against
USD
INR
1 EUR =
1.0746
89.6512
1 GBP =
1.2555
104.7432
100 JPY =
153.20
54.4566
1 AUD =
0.6581
54.9036
1 CHF =
0.9068
92.0021
Precious Metals
Updated: 17:30 hrs. (12:00 GMT) as on 03rd May , 2024
Gold ($/oz)
2294.45
Silver ($/oz)
26.50
Stock Indices
Index Close
02nd May, 2024
03rd May, 2024
BSE Sensex
73671.28
73878.15
NSE Nifty
22643.50
22648.20
Dow Jones
38386.06
38675.68
NASDAQ
15983.08
16156.33
Major Economic Data Releases for the Day
Date
Region
Time (IST)
Description
N0 Major data
GDP m/m
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