Last Updated on: 24/06/2024
TODAY: Monday, 24th June, 2024
USD/INR:
Rupee is back to its range and the last Thursday’s move seems to be ad hoc and flow-driven. Friday saw mild pull-back in USDINR despite strong Dollar. Globally Dollar is on the front foot even as rate cut expectations remain intact. JPY is weak and is moving towards the 160 mark.
Dollar Index is at 105.85, with EUR at 1.0690, GBP at 1.2635 and JPY at 159.70. US yields are stable, waiting for the next data set, but reflecting possibility of two cuts this year. This week’s US PCE inflation is a critical data point, in the context of signs of moderating labor market.
USDINR continues to tread water, and there is no momentum on either side to convincingly take the pair above the current range. But, a lot depends on the RBI’s approach to the Rupee, and given that most traders are accustomed to the low-volatility regime, even moderate flows can cause large impact if the RBI steps away. The global backdrop is still benign and the Dollar strength is not yet enough to cause a sustained INR depreciation, as the US yields are reflecting lower future rates. At this juncture, INR bias is more correlated to yields than the Dollar. The surprising resilience of the US economy is set to continue, moderating rate cut expectations. We can expect USDINR to trade in a range as a base case, but with a mild bias towards more up side as the Dollar continues to trade firm.
MAJOR WORLD CURRENCIES:
USD:
Most Asian currencies were fragile on Monday as the dollar steadied near two-month highs, while weakness in the Japanese yen sparked caution over potential intervention measures by Tokyo.
Sentiment towards regional markets was also dampened by fears of a trade war between China and the European Union, after Chinese officials warned of retaliatory measures against European tariffs on Chinese electric vehicles.
Markets were also reeling from stronger-than-expected U.S. purchasing managers index readings, which sparked heavy flows into the dollar and out of risk-driven assets.
The yen was the biggest point of focus among Asian currencies on Monday, as its USDJPY pair, which gauges the amount of yen needed to buy one dollar, came within spitting distance of 160 yen.
The level was the pair’s highest since 1986, and had attracted heavy amounts of government intervention in currency markets in May, which saw the USDJPY pair fall as low as 151.
The yen’s recent weakness drew warnings from several major Japanese officials over more intervention. Top currency diplomat Masato Kanda said the government would “intervene 24 hours a day if necessary.”
His comments spurred some strength in the yen, with the USDJPY pair falling to 159.7 yen.
The Chinese yuan’s USDCNY pair steadied at a seven-month high on Monday, as the yuan was battered in recent weeks by souring relations between China and the EU.
Chinese officials said over the weekend that a trade war with the EU was possible in the face of import tariffs on Chinese EVs. German and Chinese ministers were also set to meet this week.
Concerns over a trade war kept traders averse to risk-heavy currencies, which sparked weakness in most Asian units. The Australian dollar’s AUDUSD pair fell 0.1%, while the South Korean won’s USDKRW pair rose 0.1%.
The Singapore dollar’s USDSGD pair rose slightly, while the Indian rupee’s USDINR pair fell 0.1% but remained in sight of recent record highs.
The dollar index and dollar index futures both rose slightly in Asian trade and were at their highest levels since early-May.
The greenback was boosted by stronger-than-expected PMI readings, which sparked concerns that a resilient U.S. economy would give the Federal Reserve more headroom to keep rates high.
Focus was now on key PCE price index data, due this Friday. The reading is the Fed’s preferred inflation gauge and is likely to factor into the outlook for interest rates.
EUR/USD:
The EUR/USD pair remains depressed for the third straight day on Monday and trades around the 1.0690-1.0685 region during the Asian session, just above its lowest level since early May.
The shared currency continues to be undermined by uncertainties about the outcome of a snap election in France, which has been fueling concerns that a new government will worsen the fiscal situation in the Eurozone's second-largest economy. Furthermore, the flash PMIs released on Friday indicated that the growth of business activity in the Eurozone slowed sharply in June. This, along with some follow-through US Dollar (USD) buying, turns out to be key factors exerting downward pressure on the EUR/USD pair.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, advances to its highest level since May 9 in the wake of Friday's flash PMI, which showed the US business activity crept up to a 26-month high in June. The data backs the case for the Federal Reserve's (Fed) patient approach, though signs of easing inflationary pressure keep a September rate cut on the table. This might hold back the USD bulls from placing aggressive bets and help limit any further depreciating move for the EUR/USD pair.
Traders might also prefer to wait for this week's release of the US Personal Consumption Expenditures (PCE) Price Index data on Friday for cues about the Fed's rate-cut path. This, in turn, will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the EUR/USD pair. Traders now look to the release of German IFO Business Climate and speeches by influential FOMC members to grab short-term opportunities in the absence of any relevant macroeconomic releases from the US.
GBP/USD:
The GBP/USD pair kicks off the new week on a subdued note and remains well within the striking distance of its lowest level since mid-May touched on Friday. Spot prices currently trade around the 1.2635 area, with bears awaiting a sustained break and acceptance below the 100-day Simple Moving Average (SMA) before positioning for an extension of the recent pullback from a multi-month peak.
The British Pound (GBP) continues to be undermined by the Bank of England's (BoE) dovish pause last week, which lifted bets for an interest rate cut at the August monetary policy meeting. Adding to this, the flash UK PMIs released on Friday showed that private sector business activity expanded in June at its slowest rate since last November. This, along with some follow-through US Dollar (USD) buying, turns out to be another factor weighing on the GBP/USD pair.
Against the backdrop of the Federal Reserve's (Fed) hawkish surprise earlier this month, forecasting only one rate cut this year, data released on Friday showed the US business activity crept up to a 26-month high in June. Apart from this, a cautious market mood lifts the safe-haven buck to its highest level since May 9 and further contributes to the offered tone surrounding the GBP/USD pair, though the lack of follow-through selling warrants caution for bearish traders.
Market participants are still pricing in the possibility of two interest rate cuts by the Fed in 2024 amid signs of easing inflationary pressures in the US. This might keep a lid on any further appreciating move for the Greenback and help limit the downside for the GBP/USD pair. Traders might also refrain from placing aggressive directional bets ahead of the UK general election on July 4 and in the absence of any relevant market-moving macroeconomic released on Monday.
Gold
Gold price (XAU/USD) finds some support near the $2,317 region during the Asian session on Monday and for now, seems to have stalled its retracement slide from a two-week high touched on Friday. Growing acceptance that the Federal Reserve (Fed) will start its rate-cutting cycle in September amid signs of easing inflationary pressures acts as a tailwind for the non-yielding yellow metal. Adding to this, a softer risk tone, persistent geopolitical tensions and political uncertainty in Europe lend support to the safe-haven commodity.
Meanwhile, the stronger-than-expected US PMIs released on Friday pointed to a still resilient economy. This comes on top of the Fed's hawkish surprise earlier this month, forecasting only one rate cut in 2024, which continues to underpin the US Dollar (USD) and should keep a lid on any meaningful upside for the Gold price. Traders might also prefer to move to the sidelines ahead of this week's release of the final US Q1 GDP print and the Personal Consumption Expenditures (PCE) Price Index before placing fresh directional bets.
1.
USD/INR as on 21st June, 2024
Currency
OPEN
HIGH
LOW
CLOSE
USD/INR
83.5925
83.6250
83.49
83.5325
Forward premium (%) as on 21th June, 2024
Periods
1 Month
3 Month
6 Month
12 Month
Premium
1.02/1.17
1.10/1.15
1.29/1.31
1.62/1.63
USD/INR Cash/Tom/Spot Levels: (in Paisa)
(Updated as on 24th June 2024, @ 09.00am)
Cash/Tom: 0.10/0.80 Cash/Spot:0.20/1.60
Tom/Spot: 0.10/0.80 Spot/Next: 0.10/0.80
Cash Date: 24.06.2024
Tom Date: 25.06.2024
Spot Date: 26.06.2024
Outlook for the day 24th June, 2024
Rupee expected to trade in range of 83.45-83.65
MAJOR WORLD CURRENCIES: as on (21st June, 2024)
CURRENCY
GBP
1.2656
1.2676
1.2620
1.2645
EUR
1.0700
1.0720
1.0668
1.0691
AUD
0.6653
0.6669
0.6629
0.6639
JPY
158.93
159.84
158.66
159.79
CHF
0.8914
0.8944
0.8903
0.8937
XAU
2359.85
2368.60
2316.566
2320.3450
Foreign Currencies
Updated: 17:30 hrs. (12:00 GMT) on 21st June, 2024
USD/INR: 83.5375 [FXIR]
Against
USD
INR
1 EUR =
1.0689
89.2932
1 GBP =
1.2643
105.6165
100 JPY =
158.91
52.5691
1 AUD =
0.6665
55.6777
1 CHF =
0.8922
93.6309
Precious Metals
Updated: 17:30 hrs. (12:00 GMT) as on 21th June, 2024
Gold ($/oz)
2364
Silver ($/oz)
30.43
Stock Indices
Index Close
20th june, 2024
21st june, 2024
BSE Sensex
77478.98
77209.90
NSE Nifty
23567.00
23501.10
Dow Jones
39134.76
39150.33
NASDAQ
17721.59
17689.36
Major Economic Data Releases for the Day
Date
Region
Time (IST)
Description
24.06.2024
1.30pm
German ifo Business Climate
12.30pm
FOMC Member Waller Speaks
CAD
11.15pm
BOC Gov Macklem Speaks
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