Last Updated on: 23/07/2024
TODAY: Tuesday, 23rd July, 2024
USD/INR:
Dollar is stable, but JPY managed a rebound yesterday. US yields continue to indicate a cut coming in September. Dollar Index is at 1024.25, with EUR at 1.0890, GBP at 1.2930 and JPY at 156.75. US tech rebound yesterday buoyed up markets, and the DOW managed a 0.3% rise, with the S&P jumping by around 1%+. Indian indices also managed a green close after the sharp correction on Friday.
With no real macro triggers at play until the PCE inflation at the end of this week, the base case scenario of sideways Dollar is likely to play out for the coming few days. US presidential election is increasingly becoming important for the market, after the withdrawal of Joe Biden from the presidential nomination, and uncertainty of who will be the Democratic nominee. As for the Rupee, for now, it seems to have found a mildly higher range and is still biased towards slight depreciation given that the long-standing levels are broken. But the global environment is benign enough to keep INR from a runaway move. CNY stability remains key to the Rupee move now.
MAJOR WORLD CURRENCIES:
USD:
The U.S. dollar was slightly higher on Monday in quiet trading overall, as investors digested U.S. President Joe Biden's decision to end his re-election campaign, a scenario which could inject more volatility into the currency market.
Against the yen, however, the dollar weakened after two straight days of gains.
Market participants also looked to next week's crucial Federal Reserve and Bank of Japan monetary policy meetings. The Fed could signal it is ready to start its easing cycle by its next meeting in September, while the BOJ, in contrast, could start to raise interest rates, giving the yen a bit of a boost.
The dollar index - a measure of its value relative to a basket of foreign currencies - rose 0.1% to 104.32.
The U.S. election aside, analysts noted that the yen could be at a turning point against the dollar after falling since the beginning of 2024, as the Fed is close to cutting rates and the BOJ is widely expected to tighten monetary policy soon.
The U.S. central bank's rate-setting Federal Open Market Committee (FOMC) and the BOJ will hold two-day policy meetings on July 30-31. Money markets have nearly fully priced in a Fed rate cut by September.
The greenback fell 0.3% versus the yen to 157.10., while the euro was last flat against the dollar at $1.0886.
GBP/USD:
The GBP/USD pair struggles to capitalize on the previous day's modest bounce from the 1.2900 neighborhood and oscillates in a narrow trading band during the Asian session on Tuesday. Spot prices currently hover around the 1.2930 area, nearly unchanged for the day, and remain at the mercy of the US Dollar (USD) price dynamics.
Investors have fully priced in an interest rate cut by the Federal Reserve (Fed) at the September policy meeting, which keeps the US Treasury bond yields depressed. This, in turn, prompts some USD selling and turns out to be a key factor acting as a tailwind for the GBP/USD pair. Apart from this, the diminishing odds of an interest rate cut by the Bank of England (BoE) in August offer some support to the currency pair.
On the flip side, bearish traders need to wait for a sustained break and acceptance below the 1.2900 round-figure mark before placing fresh bets. The said handle should now act as a key pivotal point, below which the GBP/USD pair could decline further towards intermediate support near the 1.2855 zone before eventually dropping to the 1.2820-1.2815 region and the 1.2800 round-figure mark.
EUR/USD:
EUR/USD advances for the second consecutive day, trading around 1.0900 during Tuesday's Asian session. The analysis of the daily chart shows a weakening of a bullish trend, as the pair is positioned below an ascending channel.
Moreover, the 14-day Relative Strength Index (RSI), a momentum indicator, is above the 50 level, further affirming the bullish sentiment for the EUR/USD pair. Further movement will give a clear directional trend.
The EUR/USD pair could retest a potential resistance near a four-month high at 1.0922, observed on July 15, followed by the lower boundary of the ascending channel around the level of 1.0940.
A return to the ascending channel will improve the bullish bias and support the EUR/USD pair to approach the psychological level of 1.1000, followed by the upper boundary of the ascending channel near 1.1100.
On the downside, the nine-day Exponential Moving Average (EMA) at 1.0883 level acts as immediate support. A break below this level could exert downward pressure on the EUR/USD pair to navigate the region around the key level of 1.0670, potentially serving as a throwback support level.
Gold
Gold price extended its recent corrective slide from the record high touched last week and fell to a more than one-week trough on Monday. US President Joe Biden's withdrawal from the 2024 Presidential election increased the chances of Donald Trump becoming the next US President, raising hopes of a looser regulatory environment.
Despite the return of risk-off flows, the US Dollar (USD) turns defensive, tracking the retreat in the US Treasury bond yields from two-week highs. Reports that US Vice President Kamala Harris secured 1976 delegates to become the Democratic Party’s presumptive nominee for November’s presidential election exert downward pressure on the Greenback.
It’s worth noting that Donald Trump’s chances of winning the election have narrowed after Joe Biden stepped down to allow Harris to run for the White House. A Democratic win in the US presidency would imply higher taxes and the need for lower borrowing costs, suggesting that the US Federal Reserve (Fed) would have to keep the policy accommodative. This, in turn, would be bearish for the US Dollar in the long term.
Traders turn risk-averse, as worries over China’s economic slowdown mount while nervousness sets in before earnings at Tesla and Alphabet are due after Tuesday’s New York close. Investors scurry for safety in the traditional safe-haven Gold during such times. However, China is the world’s top yellow metal consumer and the slowing growth raises concerns over its physical demand for Gold.
According to Goldman Sachs, “Chinese gold demand is now cyclically soft due to recent price surges, but central banks in emerging markets including China are likely to continue to buy gold frequently, whether disclosed or not,” per Reuters.
Traders also eagerly await the US Gross Domestic Product (GDP) report for the second quarter on Thursday and Personal Consumption Expenditures (PCE) inflation data for June on Friday before placing any directional bets on the Gold price.
In the meantime, the mid-tier US housing data, the political developments and the corporate earnings will drive risk trends, eventually impacting the USD-denominated Gold price.
From a broader perspective, Gold price remains supported by the Fed interest-rate cut expectations, with a September easing almost a done deal. Markets are currently pricing in a September rate cut, as futures show a 97% chance, according to the CME Group’s FedWatch Tool.
USD/INR as on 22nd July, 2024
Currency
OPEN
HIGH
LOW
CLOSE
USD/INR
83.7110
83.7120
83.6250
83.6514
Forward premium (%) as on 22nd July , 2024
Periods
1 Month
3 Month
6 Month
12 Month
Premium
1.06/1.19
1.16/1.21
1.35/1.38
1.75/1.77
USD/INR Cash/Tom/Spot Levels: (in Paisa)
(Updated as on 23rd July 2024, @ 09.00am)
Cash/Tom: 0.05/0.75 Cash/Spot:0.10/1.50
Tom/Spot: 0.05/0.75 Spot/Next: 0.05/0.75
Cash Date: 23.07.2024
Tom Date: 24.07.2024
Spot Date: 25.07.2024
Outlook for the day 23rd July, 2024
Rupee expected to trade in range of 83.58-83.70
MAJOR WORLD CURRENCIES: as on (22nd July, 2024)
CURRENCY
GBP
1.2908
1.2942
1.2903
1.2932
EUR
1.0880
1.0902
1.0871
1.0889
AUD
0.6681
0.6702
0.6630
0.6642
JPY
157.44
157.61
156.27
157.00
CHF
0.8889
0.8902
0.8869
0.8845
XAU
2399.90
2412.09
2383.79
2397.64
Foreign Currencies
Updated: 17:30 hrs. (12:00 GMT) on 22nd July , 2024
USD/INR: 83.6675 [FXIR]
Against
USD
INR
1 EUR =
1.0878
91.0081
1 GBP =
1.2923
108.1170
100 JPY =
156.85
53.3392
1 AUD =
0.6654
55.6690
1 CHF =
0.8882
94.1933
Precious Metals
Updated: 17:30 hrs. (12:00 GMT) as on 22nd July , 2024
Gold ($/oz)
2392.70
Silver ($/oz)
29.07
Stock Indices
Index Close
19th July , 2024
22nd July , 2024
BSE Sensex
80605.65
80502.08
NSE Nifty
24530.90
24509.25
Dow Jones
40287.53
40415.44
NASDAQ
17726.94
18007.57
Major Economic Data Releases for the Day
Date
Region
Time (IST)
Description
NIL
NO MAJOR DATA
y/y
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