Last Updated on: 03/07/2024
TODAY: Wednesday, 3rd July, 2024
USD/INR:
Dollar is slightly weaker against EUR, but has surged higher against JPY, supported by the firm US long term yields. INR gave up some of the previous day’s gains, tracking JPY, higher crude prices and rising US yields. EUR rose after the results of the first round of the French elections came in mildly better in that the Right wing party garnered lesser majority than what the initial polls suggested.
Dollar Index is at 105.90, with EUR at 1.0735, GBP at 1.2635 and JPY at 161.60. The US 10y yield has risen to 4.45%. JPY is now primed for intervention, but markets continue to take USDJPY higher in line with rate differentials. Dollar, on the other hand, remains neutral in its bias as US inflation numbers remain subdued and US rate cut hopes remain very much alive. US equities closed in the green yesterday, and the DOW ended 0.13% higher while S&P 500 rose 0.25% and the tech index jumped 0.8%. Indian equities have been buoyant for the past few days now, post the elections, but not ready to take the next leap at least until the budget.
INR could keep fluctuating within the current range but will be influenced by the JPY weakness. Of late, long-term US yields have been seeing upward pressure, and have not been too reactive to the narrative about the rate cut cycle.
MAJOR WORLD CURRENCIES:
USD:
The dollar slipped on Tuesday in thin, choppy trading after Federal Reserve Chair Jerome Powell struck a moderately dovish tone in his comments, suggesting that the U.S. central bank is more than likely to start its easing cycle later this year.
Powell, in a monetary policy conference in Portugal, said the U.S. economy has made significant progress on inflation as it gets back on the disinflationary path. His remarks were viewed as dovish, analysts said.
Comments by the Fed's top official outweighed data showing U.S. job openings increased in May after posting outsized declines in the prior two months. Job openings, a measure of labor demand, rose 221,000 to 8.140 million on the last day of May, according to the Job Openings and Labor Turnover Survey or JOLTS report.
Economists polled by Reuters had forecast 7.910 million job openings in May. Data for April was revised lower to show 7.919 million unfilled positions instead of the previously reported 8.059 million.
EUR/USD:
EUR/USD bounces back strongly from the intraday low near the round-level support of 1.0700 in Tuesday's American session. The major currency pair recovers after discussions between ECB President Christine Lagarde and Federal Reserve (Fed) Chair Jerome Powell at the ECB Forum on Central Banking in Sintra, Portugal. In conversation, ECB Lagarde acknowledged that inflation in the Eurozone economy is moving in the right direction and the central bank is very advanced in the disinflation path. She added, "We don't need to have services inflation at 2%."
Earlier, the Euro remained under pressure due to an expected decline in the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data for June. Annual HICP decelerated to 2.5%, as expected, year-on-year from May’s reading of 2.6%. In the same period, the core HICP, which excludes volatile components like food, energy, alcohol, and tobacco, grew steadily by 2.9%. Investors expected the underlying inflation to have declined to 2.8%. Core inflation measure rose at a steady pace due to sticky service inflation. Price pressures in the service sector rose in line with the pace of 4.1% as registered in May. Current inflation readings are unlikely to provide cues about where price pressures are heading.
GBP/USD:
The negative shift seen in risk sentiment helps the US Dollar (USD) find demand on Tuesday and doesn't allow GBP/USD to stage a rebound. Reflecting the souring mood, US stock index futures are down between 0.3% and 0.5%.
In the second half of the day, Federal Reserve (Fed) Chairman Jerome Powell will speak on the policy outlook at the ECB Forum on Central Banking.
Markets currently price in a nearly 35% probability of the Fed leaving the policy rate unchanged in September, according to the CME FedWatch Tool. In case Powell acknowledges improving inflation outlook following last Friday's Personal Consumption Expenditures (PCE) Price Index, the USD could have a hard time finding demand. On the other hand, the market positioning suggests that there is room for further USD strength if Powell pushes back against the market expectation for a rate reduction in September.
Gold
Gold price slid during the North American session as market participants digested Federal Reserve (Fed) Chair Jerome Powell’s comments at a European Central Bank (ECB) forum in Portugal. Powell turned slightly dovish, yet US Treasury yields remained firm. The Greenback fluctuated but remained within familiar levels. Therefore, the XAU/USD trades at $2,324, down 0.28%.
Powell commented that the disinflation process has resumed yet stated that he’d like to see further progress before cutting interest rates.
US jobs data revealed that job vacancies surprisingly rose above estimates, displaying the robustness of the labor market amid high interest rates of 5.25%-5.50% set by the Fed.
Further data is expected on Wednesday, led by the release of the Federal Open Market Committee's (FOMC) last Meeting Minutes, alongside Services PMIs from S&P Global and the Institute for Supply Management (ISM).
USD/INR as on 02nd July, 2024
Currency
OPEN
HIGH
LOW
CLOSE
USD/INR
83.5050
83.5650
83.4650
Forward premium (%) as on 02nd July, 2024
Periods
1 Month
3 Month
6 Month
12 Month
Premium
1.06/1.20
1.12/1.16
1.28/1.30
1.63/1.65
USD/INR Cash/Tom/Spot Levels: (in Paisa)
(Updated as on 03rd July 2024, @ 09.00am)
Cash/Tom: 0.10/1.60 Cash/Spot:0.10/1.60
Tom/Spot: -/- Spot/Next: 0.15/2.40
Cash Date: 03.07.2024
Tom Date: 04.07.2024
Spot Date: 05.07.2024
Outlook for the day 03rd July, 2024
Rupee expected to trade in range of 83.42-83.62
MAJOR WORLD CURRENCIES: as on (02nd July , 2024)
CURRENCY
GBP
1.2645
1.2687
1.2612
1.2684
EUR
1.0739
1.0747
1.0744
AUD
0.6658
0.6670
0.6632
0.6666
JPY
161.49
161.75
161.26
161.44
CHF
0.9026
0.9049
0.9023
0.9037
XAU
2331.55
2336.69
2318.97
2329.28
Foreign Currencies
Updated: 17:30 hrs. (12:00 GMT) on 02nd July , 2024
USD/INR: 83.51 [FXIR]
Against
USD
INR
1 EUR =
1.0724
89.5561
1 GBP =
1.267
105.8072
100 JPY =
161.63
51.6674
1 AUD =
0.6648
55.5174
1 CHF =
92.4090
Precious Metals
Updated: 17:30 hrs. (12:00 GMT) as on 02nd July , 2024
Gold ($/oz)
2331.75
Silver ($/oz)
29.31
Stock Indices
Index Close
01st July , 2024
02nd July , 2024
BSE Sensex
79476.19
79441.45
NSE Nifty
24141.95
24123.85
Dow Jones
39169.52
39331.85
NASDAQ
17879.30
18028.76
Major Economic Data Releases for the Day
Date
Region
Time (IST)
Description
03/07/24
05.45 PM
ADP Non-Farm Employment Change
y/y
06.00 PM
Unemployment Claims
07.15 PM
Final Services PMI
07.30 PM
ISM Services PMI
07.45 PM
ECB President Lagarde Speaks
11.30 PM
FOMC Meeting Minutes
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