TODAY: Tuesday, 15th July, 2024

USD/INR:

Despite the Dollar’s weakness, INR traded under pressure trying to breach the upper end of the current range. Powell, in his speech yesterday, hinted at shifting focus towards the labor market, implying that the FOMC might be amenable to cut rates to ensure that the labor market weakness does not magnify. Dollar Index is at 104.30, with EUR at 1.0890, GBP at 1.2965 and JPY at 158.50. US 10y yield is down to 4.21%. US indices were higher, with the DOW closing 0.5%+ up. Indian indices also remain in the positive territory – Sensex ended 0.2% higher and the broader market was higher by 0.5%+.

USDINR has been under pressure, despite the positive global environment, probably owing to ad hoc flows. With inflation out of the way, market will focus on retail sales and jobless claims data until the month-end. For the Rupee, the union budget, slated on 23^rd of this month, is important to gauge whether the reform push proposed before the elections would see action. Despite the bout of weakness, it is unlikely that the Rupee will see a significant depreciation move, especially given significant probability of September rate cut being priced in.

MAJOR WORLD CURRENCIES:

EUR/USD hovers in a tight range near the round-level figure of 1.0900 in Tuesday’s European session as the upside move stalls with a focus on Thursday's European Central Bank (ECB) monetary policy meeting. The major currency pair is broadly firm as investors expect the ECB will not deliver subsequent rate cuts. 

The ECB is expected to leave its key rates unchanged as policymakers worry that an aggressive policy-easing approach could uplift price pressures again. In the last monetary policy meeting, the ECB forecasted the price pressures to remain at their current levels for the entire year.

GBP/USD:

The Pound Sterling (GBP) consolidates slightly below the psychological resistance of 1.3000 against the US Dollar (USD) in Tuesday’s London session. The GBP/USD pair struggles to extend its upside as the US Dollar gains ground after Federal Reserve (Fed) Chair Jerome Powell’s speech at the Economic Club of Washington on Monday.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, manages to hold the key support at around 104.00.

Powell acknowledged that recent inflation data has added confidence that inflation is on course to return to the desired rate of 2%. However, he mentioned that policymakers need to gain more confidence before considering interest rate cuts.

Gold

Gold (XAU/USD) is up over half a percent on Tuesday, trading in the $2,440s as it inches up toward the $2,451 all-time high. The rally in the yellow metal is being supported by heightened expectations that the Federal Reserve (Fed) will cut interest rates at their meeting in September as inflation continues to show signs of cooling.  

The firmer expectations that interest rates will be lowered contrast with the Fed’s previous non-committal, ambiguous stance. Lower interest rates are positive for Gold because they lower the opportunity cost of holding the non-interest-bearing asset

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

(Updated as on 16^th July 2024, @ 09.00am)

 Cash/Tom: 0.05/0.75                    Cash/Spot:0.15/2.25

 Tom/Spot:  0.10/1.50                    Spot/Next: 0.05/0.75

Cash Date:  16.07.2024

Tom Date:   18.07.2024

Spot Date:  19.07.2024

Outlook for the day 16^th July, 2024

Rupee expected to trade in range of 83.50-83.65

MAJOR WORLD CURRENCIES: as on (15^th July , 2024)

Foreign Currencies

Updated: 17:30 hrs. (12:00 GMT) on 15^th July , 2024

Precious Metals

Updated: 17:30 hrs. (12:00 GMT) as on 15^th July , 2024

Stock Indices

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