Last Updated on: 12/07/2024
TODAY: Friday, 12th July, 2024
USD/INR:
Dollar is weak after lower-than-expected US CPI firmed up rate cut expectations and reaffirmed Powell’s dovish tilt in his testimony. The headline CPI came in at 3% against consensus estimate of 3.1%. The core CPI also was lower than expected and the MoM number was negative. Rate cut probabilities spiked to 85%+ for September post the data.
Dollar Index is at 104.55, with EUR at 1.0865, GBP at 1.2905 and JPY at 159.30. US 10y is down to 4.22%. Falling US yields have directly helped JPY strength. US equities were down due to steep fall in tech stocks on the back of “sell the news” profit taking post the CPI. Indian markets were flat yesterday and should see some positivity today due to the inflation cheer.
Rupee has not really captured much benefit of the Dollar downside until now, but is set for some upside especially given the pullback in USDJPY. The medium-term global picture remains benign with inflationary pressures receding and FOMC amenable to rate cuts. The current level of USDINR forms a good resistance and the Rupee might continue to trade sideways for more days to come.
MAJOR WORLD CURRENCIES:
USD:
The dollar steadied against a basket of currencies on Friday after softer-than-expected inflation data saw the greenback sink to one-month lows, amid increased bets that the Federal Reserve will cut interest rates in September.
Broader foreign exchange markets were somewhat cautious amid volatility in the Japanese yen. The Japanese currency strengthened sharply on late-Thursday, which sparked speculation over whether the Japanese government had intervened in currency markets.
The euro moved little against the dollar German wholesale price index inflation data read slightly weaker than expected for June. The EURUSD pair steadied after surging to an over one-month high against the dollar on Thursday.
The British pound was also flat, with the GBPUSD pair moving little after rallying to a near one-year high against the dollar on Thursday. The pound was also buoyed by data on Thursday which showed the British economy grew more than expected in May.
EUR/USD:
EUR/USD gathered bullish momentum in the American session on Thursday and reached its highest level since early June at 1.0900. After staging a downward correction, the pair holds comfortably above 1.0850 in the European session on Friday.
Soft inflation data from the US caused the US Dollar (USD) to come under heavy selling pressure. The Consumer Price Index (CPI) declined by 0.1% on a monthly basis, while the core CPI rose only 0.1% in the same period. Both of these readings came in below market expectations and allowed investors to continue to price in a Federal Reserve (Fed) rate cut in September.
According to the CME FedWatch Tool, the probability of the Fed leaving the policy rate unchanged in September declined below 10% from above-20% before the CPI data releases.
In the second half of the day, the Producer Price Index (PPI) data for June will be featured in the US economic docket. On a monthly basis, the PPI is forecast to rise 0.1%. A negative reading could put additional weight on the USD's shoulders and help EUR/USD push higher. On the other hand, a stronger-than-forecast increase could help the USD stay resilient against its rivals but market reaction could remain limited.
GBP/USD:
Softer-than-expected inflation readings have weighed heavily on the US Dollar and boosted Fed officials' confidence that the disinflation process has resumed. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, remains on the backfoot below 104.50.
On Thursday, San Francisco Fed Bank President Mary Daly said recent cooler inflation readings and easing labor market conditions have made one or two rate cuts appropriate for this year.
In Friday’s session, investors will focus on June’s US Producer Price Index (PPI) data, which will be published at 12:30 GMT. Economists expect that headline and core producer inflation accelerated in June on a monthly as well as annual basis.
Gold
Thursday’s data showed US headline inflation cooling to 3.0% year-on-year in June, below estimates of 3.1% and the previous month's 3.3%.
On a monthly basis, CPI fell by 0.1% in June – the biggest outright decline in prices since May 2020 during the Covid-19 pandemic, according to Deutsche Bank’s Global Head of Macro Research, Jim Reid.
Meanwhile, core CPI – which excludes volatile food and energy components – slowed to 3.3%, falling below expectations of 3.4% from 3.4% previously. On a 3-month annualized basis, moreover, core inflation is now just above the Fed’s 2.0% target.
USD/INR as on 12th July, 2024
Currency
OPEN
HIGH
LOW
CLOSE
USD/INR
83.5025
83.5925
83.4900
83.5600
Forward premium (%) as on 11th July, 2024
Periods
1 Month
3 Month
6 Month
12 Month
Premium
1.02/1.16
1.12/1.16
1.28/1.31
1.66/1.68
USD/INR Cash/Tom/Spot Levels: (in Paisa)
(Updated as on 12th July 2024, @ 09.00am)
Cash/Tom: 0.10/0.75 Cash/Spot:0.40/2.75
Tom/Spot: 0.30/2.00 Spot/Next: 0.10/0.75
Cash Date: 12.07.2024
Tom Date: 15.07.2024
Spot Date: 16.07.2024
Outlook for the day 12th July, 2024
Rupee expected to trade in range of 83.40-83.60
MAJOR WORLD CURRENCIES: as on (11th July , 2024)
CURRENCY
GBP
1.2847
1.2947
1.2844
1.2909
EUR
1.0830
1.0899
1.0825
1.0865
AUD
0.6747
0.6798
0.6741
0.6759
JPY
161.63
161.75
157.41
158.80
CHF
0.8995
0.8997
0.8913
0.8963
XAU
2371.36
2424.44
2370.59
2414.78
Foreign Currencies
Updated: 17:30 hrs. (12:00 GMT) on 11th July , 2024
USD/INR: 83.5250 [FXIR]
Against
USD
INR
1 EUR =
1.0845
90.6262
1 GBP =
1.2873
107.5732
100 JPY =
161.58
51.7174
1 AUD =
0.6754
56.4398
1 CHF =
0.8980
93.0568
Precious Metals
Updated: 17:30 hrs. (12:00 GMT) as on 11th July , 2024
Gold ($/oz)
2409.20
Silver ($/oz)
31.01
Stock Indices
Index Close
10th July , 2024
11th July , 2024
BSE Sensex
79924.77
79897.34
NSE Nifty
24324.45
24315.95
Dow Jones
39721.36
39753.75
NASDAQ
18647.45
18283.41
Major Economic Data Releases for the Day
Date
Region
Time (IST)
Description
12/07/24
06.00 PM
Core PPI m/m
y/y
PPI m/m
Prelim UoM Consumer Sentiment
Prelim UoM Inflation Sentiment
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