Last Updated on 14/08/2020
NRI Newsletter - Market News

 

TODAY: Friday, 14th August, 2020

As on 13th August 2020

USD/INR:

The rupee settled on a flat note, edging lower to 74.8450 (provisional) against the US dollar on Thursday, tracking muted domestic equities. During the session, the domestic unit witnessed an intra-day high of 74.78 and a low of 74.92 against the greenback. It had ended at 74.83 against the US dollar in the previous session. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.32 per cent to 93.14. Investors are awaiting Consumer Price Index (CPI) data scheduled to be released later in the day for further cues, forex traders said. On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 27.93 points lower at 38,341.70 and the broader NSE Nifty was trading 1 point up at 11,309.40.

 

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 351.15 crore on Wednesday, according to provisional exchange data.

 

 

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

(Updated as on 14th August 2020 @ 10.00am)

 

Cash/Tom : 1.00/3.00        Cash/Spot : 1.25/4.25

Tom/Spot  : 0.25/1.25         Spot/Next : 0.25/1.25

 

Cash Date  : 14th August, 2020

Tom Date    : 17th August, 2020

Spot Date   : 18th August, 2020

 

Outlook for the day

USD/INR expected to trade in the range 74.80 to 75.00 with a higher bias. All major currencies are expected to trade lower against the US dollar.

 

 

USD/INR as on 14th August 2020

Currency

OPEN

HIGH

LOW

CLOSE

USD/INR

74.82

74.94

74.78

74.8450

Highest close till date: 76.2750 on 23rd March,2020

 

Forward premium (%)

Periods

1 Month

3 Month

6 Month

12 Month

Premiums

3.34/3.42

3.59/3.70

3.85/3.88

3.93/3.94

 

 

 

 

 

 

 

 

 

 

MAJOR WORLD CURRENCIES:

USD:

The dollar drifted higher on Friday, helped by strong U.S. jobs data as well as firmer global demand for safe-havens amid concerns about the coronavirus recovery, setting the currency up to potentially snap a seven-week losing streak. Soft Chinese retail and production figures cast a pall over the mood in Asia, dragging on the risk-sensitive Australian and New Zealand dollars. The Aussie was last 0.2% softer at $0.7138 and has settled in to a range around that level after pulling back from a 18-month high hit a week ago. The kiwi was under pressure at $0.6537 as the country also faces a fresh COVID-19 outbreak and after dovish comments from the central bank this week. Other majors were mostly flat, but the euro EUR=EBS hovered above $1.18. “Risk sentiment is slowing down,” said Westpac FX analyst Imre Speizer. “It’s too early to say the whole (dollar) downtrend is over...but it’s got potential and at the very least it’s putting a cap on the Aussie and kiwi.” China’s industrial output rose more slowly than expected in July and retail sales fell for a seventh straight month, suggesting some bumps in even the world’s most promising rebound. Troubling signs also emerged on the health front in Asia, with a dozen new cases in New Zealand - which is considering whether to ease or extend its lockdown of Auckland - and the biggest daily jump in new cases in South Korea since March. Overnight the weekly number of applications for unemployment benefits in the United States dropped below one million for the first time since the start of the pandemic, with 963,000 claims coming in below expectations for 1.1 million. But beyond buoying the dollar any relief was short lived, as some 30 million Americans are out of work and an aid package to keep stimulus flowing in the economy has stalled in Congress. Against a basket of currencies =USD the dollar remains 0.1% lower for the week, but it has appeared to arrest a slide that has it about 9.5% below its March peak. This week has also been a bad one for the Japanese yen, which is headed for its biggest weekly drop against the dollar in two months as a jump in U.S. yields has attracted flows from Japan. Benchmark U.S. 10-year yields US10YT=RR are up nearly 15 basis points this week, the sharpest jump since early June, as the U.S. Treasury flooded the market with supply and as some investors grew more positive about the long-term outlook. The yen was steady on the dollar at 106.94 in morning trade and is a little less than 1% softer for the week. “After threatening to break lower towards the end of last month, dollar/yen has moved back within the 106.00 to 108.00 range which has held for the most part since April,” said MUFG currency analyst Lee Hardman. “The yen has been undermined in part by the ongoing improvement in global investor risk sentiment,” he said. The move is also broad, with the yen down 1.2% this week to an almost two-year low against the Swiss franc and falling more than 1% to multi-month lows against the euro and pound GBP.

EUR:

Central European currencies made slight gains on Thursday in a cautious market ahead of weekend trade talks between the United States and China. The Czech crown edged up 0.1% at 26.110 per euro as data showed an acceleration in inflation though expectations on monetary policy were unlikely to change. The central bank has signaled its readiness to tolerate overshooting of its inflation target in the coming period as the economy needed stability amidst the global coronavirus pandemic. The Polish zloty gained 0.1% to 4.3968 versus the common currency. The Romanian leu was stable. The Hungarian forint was 0.2% stronger at 344.90 to the euro, still in the range it has been in for more than two weeks. Although the Czech annual inflation accelerated to 3.4% in July, the fastest pace since February's 3.7%, it was in line with the Czech National Bank's (CNB) forecast. CNB rate-setters kept policy unchanged last week. "The episode of higher inflation should be only temporary and CNB thus won't react to higher prices, also because on the monetary policy horizon, the inflation should be again within the tolerance band," said Jakub Saidler, ING Bank chief economist for the Czech Republic. The central bank targets inflation at 2% with a tolerance band of one percentage point in either direction. Hungary's construction sector output fell by 15.7% in June after a 20.1% year-on-year slowdown in May as the coronavirus pandemic took its toll on the economy, the Central Statistics Office (KSH) said on Thursday. "The EUR/HUF exchange rate is still trading above the 200-day moving average. No economic data is going to be published today either in Hungary or the euro zone that could significantly change the trend," Erste Bank wrote in a note. Poland releases current account data at 2 p.m.(1200 GMT), which might push the zloty towards appreciation if the surplus turns out bigger than expected by the market, Bank Millennium said in a note.

GBP:                                                                                   

Sterling gained against the dollar on Thursday, rising towards a recent five-month peak, driven by a weakening dollar and rising hopes of a post-Brexit trade deal before a transition period ends this year. Irish Prime Minister Micheál Martin said on Thursday he believes there is a “landing zone” to reach a post-Brexit trade deal between the United Kingdom and the European Union. The dollar declined for a second straight day and held at a one-week low as gains in stocks and concerns over a deadlock over additional stimulus for the U.S. economy. Currency markets shrugged of weak data this week showing the British economy was among the worst-performing nations in the second quarter with analysts expecting some recovery in the coming months. Britain’s economy shrank by a record 20.4% in the second quarter, substantially worse than the euro zone (12.1%) or United States (9.5%), data on Wednesday showed. “In reality, most market participants had been penciling in a decline in Q2 GDP of ‘around’ 20% for some time now so yesterday’s release from the ONS didn’t come as too much of a surprise even if the magnitude of the contraction dwarfs anything any of us have experienced before,” RBC strategists said. Sterling advanced 0.6% to $1.3125, its biggest daily rise since the end of July. It hit a March 2020 high of $1.3185 last week. So far in August, it has been broadly in line with its pre-pandemic levels. Versus the euro, it was little changed, at 90.455 pence per euro. Even though dollar weakness boosted the British currency, investors remained cautious on the pound’s outlook for the rest of the year, expecting it to recover only in 2021.

GOLD:

Gold prices rose for a third straight session on Friday, supported by a weaker U.S. dollar, with investors awaiting the release of Chinese economic data due later in the day. Spot gold was up 0.4% at $1,960.29 per ounce by. However, bullion has fallen nearly 4% so far this week and was on track for its first weekly decline since early June. U.S. gold futures        eased 0.2% to $1,967.50 per ounce. The dollar index fell for a third consecutive session against its rivals, making gold cheaper for holders of other currencies. China is slated to publish activity data for July including retail sales, industrial production and urban investment at 0200 GMT. Data out of the United States on Thursday showed jobless claims dropped below one million last week for the first time since the start of the COVID-19 pandemic, although at least 28 million people are still receiving unemployment checks, indicating a weak labor market.              More than 20.73 million people have been reported to be infected by the novel coronavirus globally and 749,871?have died, according to a Reuters tally. Washington continues to remain in a stalemate over additional U.S. stimulus plan. President Donald Trump said he was blocking Democrats' effort to include funds for the U.S. Postal Service and election infrastructure in a new coronavirus relief bill.

As on 13th August 2020

MAJOR WORLD CURRENCIES:

 

CURRENCY

OPEN

HIGH

LOW

CLOSE

GBP/USD

1.3033

1.3123

1.3027

1.3063

EUR/USD

1.1784

1.1864

1.1779

1.1812

AUD/USD

0.7159

0.7187

0.7133

0.7148

USD/JPY

106.87

107.04

106.55

106.92

USD/CHF

0.9120

0.9133

0.9080

0.9096

XAU/USD

1919.90

1965.86

1912.44

1953.03

Foreign Currencies

Updated: 17:30 hrs (1200 GMT)

 

USD/INR: 74.8450 [FXIR]

Against

USD

INR

1 EUR    =

1.1844

88.6464

1 GBP   =

1.3101

98.0544

100 JPY =

106.85

70.0468

1 AUD   =

0.7172

53.6788

1 CHF    =

0.9104

82.2111

 

Precious Metals

 

Gold ($/oz)

1930.9817

Silver ($/oz)

26.3568

 

Stock Indices

 

Index Close

12th August

11th August

BSE Sensex

38369.63

38310.49

NSE Nifty

11308.40

11300.45

Dow Jones

27976.84

27896.72

NASDAQ

11012.24

11042.50

 

 

 

 

 

 

 

Major Economic Data Releases for the Day

Date

Region

Time(IST)

Description

14.08.20

USD

18:00

Core Retail Sales M/M

14.08.20

USD

18:00

Retail Sales M/M

14.08.20

USD

19:30

Prelim UoM Consumer Sentiment

 

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