Last Updated on: 02/07/2024
TODAY: Tuesday, 2nd 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. The US borrowing pressure, coupled with stable Dollar, could keep the yields elevated. The possibility of strong INR appreciation remains bleak in the short-term and the Rupee is set for more days of trading in the range.
MAJOR WORLD CURRENCIES:
USD:The U.S. dollar surged to a fresh 38-year peak against the yen on Monday, as Treasury yields on the long end rose sharply, keeping investors on heightened alert for intervention from Japanese authorities to bolster the country's currency.
The yen's weakness was exacerbated by data showing Japan's economy shrank more than initially reported in the first quarter.
The euro, on the other hand, climbed on Monday after a convincing and historic win by the French far right in the first round of parliamentary elections fell slightly short of some expectations, leaving the final result dependent on party deals before a second round next weekend.
In afternoon trading, the dollar soared to 161.72 yen, its strongest level since 1986. It was last up 0.4% at 161.48 yen. The yen has fallen more than 12% this year.
EUR/USD:EUR/USD clipped into a fresh multi-week high above 1.0770 on Monday before getting forced back down by a broad-market reversal in investor sentiment. Bullish momentum was cut short after US activity figures flashed warning signs of a steepening economic downturn. Investors will be buckling down for the wait to key economic figures on both sides of the Atlantic throughout the week, culminating in a fresh print of US Nonfarm Payrolls (NFP) slated for Friday.
German Consumer Price Index (CPI) figures broadly missed the mark early Monday, with annualized German CPI easing to 2.2% in June, falling from the previous 2.4% and backsliding through the forecast 2.3%. US data also missed expectations on Monday; US ISM Manufacturing Purchasing Manager Index (PMI) figures declined in June, falling to 48.5 from 48.7 and entirely missing the forecast increase to 49.1. US ISM Manufacturing Prices Paid also declined sharply in June, falling to 52.1 from the previous 57.0, falling even further beyond the forecast decline to 55.9.
GBP/USD:
The US Dollar extended its previous week’s strength and exacerbated GBP/USD’s pain. Greenback buyers flexed their muscles on fresh pushback by US Federal Reserve (Fed) policymakers against interest rate cuts this year, especially after the S&P Global preliminary US business activity jumped to a 26-month high on Friday. Data indicated fresh signs of US economic resilience, suggesting that the Fed could hold rates higher for longer.
Renewed hawkish Fed expectations boosted the US Treasury bond yields, fuelling a fresh US Dollar advance at the expense of the Pound Sterling. Markets’ pricing of a 25 basis points (bps) Fed rate cut in September stayed almost unchanged at 57% during the week, according to CME FedWatch Tool.
The US Dollar also found demand from the half-year-end flows, as traders adjusted their positions heading into a likely first interest rate cut by the Fed this year.
Gold
Gold price advances late on Monday even though the Greenback registers minuscule gains propelled by elevated US Treasury bond yields, following a release of softer-than-expected US economic data. That, along with a shortened week in observance of Independence Day in the US and an eventful week, keeps the XAU/USD trading within familiar levels near $2,331, up 0.23%.
The US economy revealed business activity figures on the manufacturing front with mixed readings. The S&P Global Manufacturing PMI stood in expansionary territory, contrary to the ISM one, which contracted for the third straight month in June.
Market participants remained cautious, with US equity indices performing mixed in the mid-North American session. Meanwhile, the US 10-year Treasury yield rose almost nine basis points to 4.489%, lending a lifeline to the Greenback, down 0.33% earlier in the day before staging a comeback, gaining 0.09%.
Traders are eyeing the Federal Reserve (Fed) Chairman Jerome Powell's speech on Tuesday, followed by the Fed’s latest monetary policy minutes on Wednesday.
USD/INR as on 01st July, 2024
Currency
OPEN
HIGH
LOW
CLOSE
USD/INR
83.38
83.4650
83.3725
83.4375
Forward premium (%) as on 01st July, 2024
Periods
1 Month
3 Month
6 Month
12 Month
Premium
1.09/1.23
1.11/1.15
1.28/1.30
1.64/1.65
USD/INR Cash/Tom/Spot Levels: (in Paisa)
(Updated as on 02nd July 2024, @ 09.00am)
Cash/Tom: 0.10/0.80 Cash/Spot:0.20/1.60
Tom/Spot: 0.10/0.80 Spot/Next: 0.20/1.60
Cash Date: 26.06.2024
Tom Date: 03.07.2024
Spot Date: 04.07.2024
Outlook for the day 02nd July, 2024
Rupee expected to trade in range of 83.42-83.60
MAJOR WORLD CURRENCIES: as on (01st July , 2024)
CURRENCY
GBP
1.2640
1.2708
1.2630
1.2647
EUR
1.0726
1.0776
1.0718
1.0738
AUD
0.6667
0.6687
0.6642
0.6659
JPY
160.88
161.73
160.63
161.45
CHF
0.8976
0.9044
0.8974
0.9028
XAU
2325.96
2338.52
2318.36
2331.69
Foreign Currencies
Updated: 17:30 hrs. (12:00 GMT) on 01st July , 2024
USD/INR: 83.3875 [FXIR]
Against
USD
INR
1 EUR =
1.0750
89.7007
1 GBP =
1.2677
105.7801
100 JPY =
161.11
51.7923
1 AUD =
0.6674
55.6895
1 CHF =
0.9012
92.5904
Precious Metals
Updated: 17:30 hrs. (12:00 GMT) as on 01st July , 2024
Gold ($/oz)
2329.10
Silver ($/oz)
29.25
Stock Indices
Index Close
28th June, 2024
01st July , 2024
BSE Sensex
79032.73
79476.19
NSE Nifty
24010.60
24141.95
Dow Jones
39118.86
39169.52
NASDAQ
17732.60
17879.30
Major Economic Data Releases for the Day
Date
Region
Time (IST)
Description
02.07.2024
12.30 AM
ECB President Lagarde Speaks
y/y
07.00 AM
Monetary Policy Meeting Minutes
02.30 PM
Core CPI Flash Estimate y/y
CPI Flash Estimate y/y
7.00 PM
Fed Chair Powell Speaks
7.30 PM
JOLTS Job Openings
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