TODAY: Friday, 5th July, 2024

USD/INR:

The rupee pared its initial losses and settled for the day on an almost flat note at 83.50 (provisional) against the US dollar on Thursday, resisting pressure from elevated crude oil prices.

Forex traders said a positive trend in domestic equities, wherein benchmark indices touched all-time high levels, and significant foreign fund inflows supported the rupee and restricted the fall. At the interbank foreign exchange market, the local unit opened at 83.52 and hit the intraday high of 83.48 and a low of 83.56 against the American currency during the session.

It finally settled at 83.50 (provisional) against the dollar, 1 paisa lower than its previous close. On Wednesday, the rupee settled 1 paisa lower at 83.49 against the US dollar. 

MAJOR WORLD CURRENCIES:

The US Dollar (USD) experienced another bearish performance, motivating the USD Index (DXY) to revisit the vicinity of the 105.00 region amidst the dominating appetite for risk-related assets and marginal trading conditions due to the US Independence Day holiday.

The downturn in the Greenback kept the upward pressure intact on EUR/USD, pushing it back above the key 1.0800 yardstick. The pressure on the Greenback intensified following discouraging results from the US economic calendar in the previous session, particularly concerning the labour market, which revived expectations of Federal Reserve (Fed) interest rate cuts as early as September.

Closer to home, the ECB published its Accounts of its June 6 meeting, where it trimmed rates by 25 bps, as widely anticipated. In the Accounts, policymakers showed concern about inflation after cutting interest rates last month, fearing further delay could be costly and complicate future efforts to anchor inflation expectations.

GBP/USD:

GBP/USD is fighting back into the high end as the Greenback broadly recedes on Thursday. Market volumes are drawn tight with US exchanges shuttered in observation of the US Independence Day holiday, and Cable traders are awaiting vote tallies in the UK’s Parliamentary Elections, which are slated to begin releasing late in the US market window.

The UK’s Labour Party is broadly expected to sweep to a massive victory on Thursday, upending 14 consecutive years of Conservative Party leadership. According to advance polling released just before election day, the British populace is forecast to reject current-Prime Minister Rishi Sunak’s Tories roundly. US Nonfarm Payrolls (NFP) jobs data is also slated for release on Friday, promising a heady end to the trading week.

Gold

With an Independence Day holiday in the US on Thursday, Gold price held higher ground near two-week highs while within a confined range due to thin liquidity conditions. Markets also stayed unnerved, as UK voters headed to polls, limiting the trading activity around the traditional safe-haven Gold price.

The Greenback continued to reel from the pain from the increase in the dovish expectations surrounding the US Federal Reserve (Fed) interest-rate cuts this year. This realized after Fed Chair Jerome Powell acknowledged progress in disinflation earlier this week. Additionally, a slew of recent US statistics also bolstered the Fed policy pivot bets, with the US private sector employment rising by 150,000 in June, following the 157,000 increase (revised from 152,000) recorded in May.

Meanwhile, the number of Americans filing first-time unemployment claims rose 4,000 last week to 238,000, according to Labor Department data released Wednesday.The figure was slightly higher than estimates of 235,000. Finally, US ISM Services PMI fell into contraction territory in June, arriving at 48.8 vs. May’s 53.8 and the expected 52.5 print.

Traders are pricing in a 73% chance of a cut in September, according to the CME FedWatch tool. Markets are also pricing in potentially two rate cuts this year.

USD/INR Cash/Tom/Spot Levels: (in Paisa)

(Updated as on 05^th July 2024, @ 09.00am)

 Cash/Tom: 0.15/2.10                    Cash/Spot:0.20/2.80

 Tom/Spot:  0.05/0.70                    Spot/Next: 0.05/0.70

Cash Date:  05.07.2024

Tom Date:   08.07.2024

Spot Date:  09.07.2024

Outlook for the day 04^th July, 2024

Rupee expected to trade in range of 83.35-83.55

MAJOR WORLD CURRENCIES: as on (04^th July , 2024)

Foreign Currencies

Updated: 17:30 hrs. (12:00 GMT) on 04^th July , 2024

Precious Metals

Updated: 17:30 hrs. (12:00 GMT) as on 04^th July , 2024

Stock Indices

*04.07.24 – USD Holiday ( US Independence Day )

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