Last Updated on: 20/06/2024
TODAY: Thursday, 20th June, 2024
USD/INR:
Dollar is trading sideways as markets bide time before the next set of data points during the month-end and the next month. Dollar Index is at 105.25, with EUR at 1.0740, GBP at 1.2710 and JPY around 158. The US 10y is at 4.25%. DOW ended 0.15% higher. Indian indices traded flattish, but the broader market indices were down 0.5%+. Indian equities now lack a trigger, as there are no announcements related to the first 100-day agenda, which was expected post the election results. The next budget could be the key event on the domestic front.
Rupee is telling the same story every day. There is no real push to come out of the current range as the global Dollar remains stable and the domestic reform agenda is uncertain now. Given the forward premiums are low, both importers and exporters should hedge moderate amounts to ensure that the eventual move out of the current range is protected against. Option hedges and even some exotic structures with knock out features can be used to manage the future risks.
MAJOR WORLD CURRENCIES:
USD:
The dollar struggled for direction on Wednesday while the euro remained close to its recent lows on concerns that a new government in France could weaken fiscal discipline, increasing the debt risk premium across the euro area.
Meanwhile sterling rose after data showed British service inflation was stronger than expected.
U.S. markets are closed on Wednesday, which is likely to result in muted trading.
The greenback dropped overnight as U.S. retail sales suggested that economic activity remained lacklustre and the Federal Reserve will cut rates sooner.
The euro rose 0.1% to $1.0746; it hit on Friday a 1-1/2-month low at $1.07.
The yield gap between French and German government debt, which is now seen as a gauge of risks of a budget crisis at the heart of Europe, eased slightly since Monday but remained close to its seven-year highs hit last week.
Analysts flagged that the single currency was far from pricing any serious threat to the financial stability of the euro area bloc.
National Rally's (NR) leader, Marine Le Pen, said she sought cohabitation with President Emmanuel Macron and would be respectful of institutions, triggering expectations that NR could backtrack on fiscally expensive pledges if it should win the elections in early July.
The European Central Bank could also buy French bonds to avoid "unwarranted and disorderly" yield spread widening. Still, ECB chief economist Philip Lane said recent market turmoil was "not disorderly".
The European Commission on Wednesday proposed widely expected disciplinary steps against France, Italy and five other European Union countries over running excessive budget deficits.
The dollar indexwas flat at 105.20.
Markets are now pricing in an around 65% chance the Fed will begin easing rates in September, according to the CME FedWatch tool, with nearly 50 basis points worth of cuts expected this year.
Sterling rose 0.1% against the euro to 84.43 pence per euro and 0.13% against the dollar to $1.2725 after British data showed underlying price pressures remained strong.
Markets priced an around 25% chance of a Bank of England rate cut in August, down from 50% before data, and 44 basis points of monetary easing in 2024, down from almost half percentage point before figures.
The BoE holds its policy meeting on Thursday.
The Swiss Franc hit a seven-month high against the euro at 0.9479, and was last down 0.1% at 0.9503.
The single currency has weakened constantly against the Swiss currency since the end of May when it hit 0.9930 per franc, its highest since April 2023.
Jordan argued that inflation risks would likely be associated with a weaker Swiss franc, which the SNB "could counteract by selling foreign exchange."
BofA expects the SNB to deliver its second 25 bps cut next week and to state a willingness "to be active in the foreign exchange market as necessary".
The Australian dollar rose 0.29% to $0.6675 against the U.S. currency, also helped by a hawkish message from Reserve Bank of Australia Governor Michele Bullock after the central bank's rate decision on Tuesday.
The yen was little changed at 157.925 per dollar, as it continues to be pressured by stark interest rate differentials between Japan and the U.S., in particular.
Analysts said Bank of Japan monetary tightening was on the horizon, but the BOJ would take a slow approach.
EUR/USD:
EUR/USD cycled on Wednesday with US markets out for a midweek holiday, and the Fiber heads into the back half of the trading week with mid-tier data on the offering, leaving investors to look ahead to Friday’s Purchasing Managers Index (PMI) activity figures for meaningful data releases to drive sentiment in either direction.
Forex Today: Attention shifts to the BoE and US data
American markets will be back in action on Thursday, just in time for the release of the latest US Initial Jobless Claims for the week ending June 14. The median market forecasts anticipate a modest drop in new US jobless benefit claims to 235K from the previous 242K, but they are still expected to surpass the four-week running average of 227K.
The European Central Bank’s (ECB) latest Economic Bulletin is also expected early in the Thursday market window, but little new information is expected as the ECB rehashes what has already been covered in previous public appearances from ECB policymakers following the latest rate call.
Friday will end the trading week with a hectic thump. Pan-European PMI survey figures will begin dropping on markets starting at 07:30 GMT, to be followed by US PMI figures at 13:45 GMT. The Pan-European HCOB Manufacturing Purchasing Managers' Index (PMI) is expected to increase to 47.9 month-over-month (MoM) from 47.3, with the Services component forecasted to rise to 53.5 from 53.2. On the US side, both the Manufacturing and Services components are anticipated to decrease. The Manufacturing component is expected to ease to 51.0 from 51.3, and the Services PMI is forecasted to drop to 53.3 from 54.8.
GBP/USD:
GBP/USD elbowed its way firmly above 1.2700 in quiet Wednesday trading as GBP traders gear up for Thursday’s latest outing from the Bank of England (BoE), which is expected to keep rates on hold at 5.25% even as UK economic data continues to miss the mark, but not badly enough to spark institutional fears of an outright recession.
Wednesday markets were throttled after US markets shuttered in observation of the midweek Juneteenth holiday, keeping broad-market volumes on the low side and giving US Dollar counterparties a chance to grind out slim gains. American markets will return to the action on Thursday, just in time for a fresh print in week-on-week US Initial Jobless Claims for the week ended June 14. Median market forecasts are expecting new US jobless benefits seekers to ease slightly to 235K from the previous 242K, but still hold above the four-week running average of 227K.
Before that, the BoE’s latest rate call and the UK central bank’s updated Monetary Policy Report will be released during the London market session. Markets broadly expect the BoE to hold interest rates at 5.25%. The BoE’s Monetary Policy Committee (MPC) voted seven-to-two to keep rates on hold, and market participants will be looking for any changes in the voting figures. Seven MPC members are currently forecast to continue voting in favor of a rate hold and two hopefuls looking for an early rate cut.
Gold
Gold price (XAU/USD) advances to over a one-week top during the Asian session on Thursday, though lacks bullish conviction and remains below the 50-day Simple Moving Average (SMA) pivotal resistance. The incoming US macro data pointed to signs of easing inflationary pressures and that the economy is slowing down, fueling speculations that the Federal Reserve (Fed) will cut interest rates twice this year. This turns out to be a key factor driving flows towards the non-yielding yellow metal.
Adding to this, geopolitical tensions and renewed political uncertainty in Europe lend additional support to the safe-haven precious metal. Meanwhile, the Fed last week adopted a more hawkish stance, and policymakers continue to argue in favor of one rate cut in 2024. Moreover, a goodish bounce in the US Treasury bond yields helps revive the US Dollar (USD) demand. This, along with a positive risk tone, further contributes to keeping a lid on any further gains for the XAU/USD.
USD/INR as on 19th June, 2024
Currency
OPEN
HIGH
LOW
CLOSE
USD/INR
83.38
83.4775
83.3350
83.4550
Forward premium (%) as on 19th June, 2024
Periods
1 Month
3 Month
6 Month
12 Month
Premium
1.06/1.20
1.15/1.20
1.31/1.33
1.64/1.65
USD/INR Cash/Tom/Spot Levels: (in Paisa)
(Updated as on 20th June 2024, @ 09.00am)
Cash/Tom: 0.10/0.80 Cash/Spot:0.40/2.60
Tom/Spot: 0.30/1.80 Spot/Next: 0.10/0.80
Cash Date: 20.06.2024
Tom Date: 21.06.2024
Spot Date: 24.06.2024
Outlook for the day 20th June, 2024
Rupee expected to trade in range of 83.35-83.55
MAJOR WORLD CURRENCIES: as on (19th June, 2024)
CURRENCY
GBP
1.2707
1.2739
1.2696
1.2717
EUR
1.0739
1.0753
1.0723
1.0742
AUD
0.6655
0.6677
0.6652
0.6671
JPY
157.83
158.10
157.59
158.08
CHF
0.8844
0.8854
0.8831
0.8842
XAU
2328.79
2334.92
2323.639
2327.4750
Foreign Currencies
Updated: 17:30 hrs. (12:00 GMT) on 19th June, 2024
USD/INR: 83.46 [FXIR]
Against
USD
INR
1 EUR =
1.0750
89.7195
1 GBP =
1.2736
106.2947
100 JPY =
157.84
52.8763
1 AUD =
0.6670
55.6678
1 CHF =
0.8848
94.3264
Precious Metals
Updated: 17:30 hrs. (12:00 GMT) as on 19th June, 2024
Gold ($/oz)
2328.60
Silver ($/oz)
29.48
Stock Indices
Index Close
18th june, 2024
19th june, 2024
BSE Sensex
77301.14
77337.59
NSE Nifty
23557.90
23516.00
Dow Jones
38834.86
-
NASDAQ
17862.23
Major Economic Data Releases for the Day
Date
Region
Time (IST)
Description
20/06/2024
1.00PM
SNB Monetary Policy Assessment
SNB Policy Rate
1.30PM
SNB Press Conference
4.30PM
Monetary Policy Summary
MPC Official Bank Rate Votes
Official Bank Rate
6.00PM
Unemployment Claims
Building Permits
Philly Fed Manufacturing Index
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