Last Updated on: 11/07/2024
TODAY: Thursday, 11th July, 2024
USD/INR:
Dollar is sideways and tentative, awaiting today’s CPI data, after Powell left the door open for rate cuts in his second day of testimony. Powell indicated that inflation need not reach 2% to start rate cuts, which is a dovish statement. Wall street rallied on his comments. US yields are marginally lower.
Dollar Index is at 105, with EUR at 1.0840, GBP at 1.2855, and JPY at 161.55. DOW rose 1%+ yesterday in anticipation of rate cuts. Indian indices were weak, after being steady for previous few sessions. Sensex fell 0.5%+.
Today’s CPI is keenly awaited, especially since Powell indicated that the FOMC is still data dependent. INR has been exceptionally quiet and has moved into more constrained range on lack of major triggers. Unless the CPI springs a surprise on either side, USDINR is set for more such days of the current range.
MAJOR WORLD CURRENCIES:
USD:
Regional currencies regained some ground against the dollar as traders largely maintained bets on a September interest rate cut by the Fed. Thursday’s consumer price index inflation report is set to offer more cues on this front.
But weak economic data saw the Japanese yen continue to lag its peers, with the currency remaining close to its weakest level in 38 years.
The dollar index and dollar index futures both fell about 0.1% in Asian trade, extending overnight losses after Powell reiterated his outlook for the U.S. economy achieving a soft landing.
A key point of pressure on the dollar was Powell stating that the Fed did not need to see inflation falling below its 2% target to begin cutting rates, only that the bank needed enough confidence that inflation was easing.
This put upcoming CPI data squarely in focus, with any signs of easing inflation likely to spur increased bets on a rate cut.
The CME Fedwatch tool showed traders maintaining a 72.5% chance the Fed will cut rates by 25 basis points in September.
EUR/USD:
The EUR/USD pair attracts buyers for the second successive day on Thursday and moves back closer to a nearly four-week high touched on Monday. Spot prices, however, remain below mid-1.0800s as traders await the release of the US consumer inflation figures before placing fresh directional bets.
Heading into the key data risk, growing acceptance that the Federal Reserve (Fed) will start cutting interest rates in September keeps the US Dollar (USD) bulls on the defensive and continues to lend some support to the EUR/USD pair. That said, the poll results of the second round of the French parliamentary elections raise the possibility of a hung parliament. This could act as a headwind for the shared currency and keep a lid on any further appreciating move for the major.
GBP/USD:
GBP/USD continues to advance for the second consecutive session, trading around 1.2860 during Asian hours on Thursday. The analysis of the daily chart shows that the pair is moving upward within an ascending channel, which indicates a bullish bias in the pair's price action.
Additionally, the 14-day Relative Strength Index (RSI) is positioned slightly below the 70 level, indicating confirmation of the bullish trend while also suggesting potential overbought conditions. A breach above this level could signal a need for caution, possibly indicating a forthcoming correction.
Gold
Following a brief pause in the Gold price recovery following round one of Fed Chair Jerome Powell’s testimony on Tuesday, buyers regained control on Wednesday after Powell’s second congressional appearance.
Powell’s caution on loosening labor market conditions suggested a September rate cut is likely on the cards, knocking off the US Dollar (USD) once again alongwith the US Treasury bond yields. Heightening dovish Fed expectations fuelled a risk-on rally on Wall Street, which exerted additional downside pressure on the safe-haven Greenback.
Broad US Dollar weakness, Gold price made another run toward $2,400 but failed due to risk appetite, diminishing the demand for the non-yielding Gold price.
On Thursday, risk flows extend into Asian trading, keeping Gold price afloat at the expense of the US Dollar. Meanwhile, the modest uptick in the US Treasury bond yields seems to lack conviction, in the face of the expected slowdown in the annual US CPI inflation data for June.
The US CPI is seen rising 3.1% YoY in June, slowing from a 3.3% increase in May while the annual core CPI inflation is likely to steady at 3.4% in the same period. On a monthly basis, CPI is set to rise 0.1% while core CPI is seen up by 0.2%.
USD/INR as on 11th July, 2024
Currency
OPEN
HIGH
LOW
CLOSE
USD/INR
83.4975
83.5250
83.4725
83.5200
Forward premium (%) as on 10th July, 2024
Periods
1 Month
3 Month
6 Month
12 Month
Premium
1.02/1.16
1.14/1.19
1.28/1.31
1.66/1.66
USD/INR Cash/Tom/Spot Levels: (in Paisa)
(Updated as on 11th July 2024, @ 09.00am)
Cash/Tom: 0.10/0.75 Cash/Spot:0.40/2.75
Tom/Spot: 0.30/2.00 Spot/Next: 0.10/0.75
Cash Date: 11.07.2024
Tom Date: 12.07.2024
Spot Date: 15.07.2024
Outlook for the day 11th July, 2024
Rupee expected to trade in range of 83.41-83.61
MAJOR WORLD CURRENCIES: as on (10th July , 2024)
CURRENCY
GBP
1.2786
1.2849
1.2780
1.2845
EUR
1.0813
1.0830
1.0809
AUD
0.6738
0.6751
0.6730
0.6747
JPY
161.32
161.82
161.24
161.67
CHF
0.8977
0.9000
0.8962
0.8994
XAU
2363.43
2386.53
2362.35
2371.07
Foreign Currencies
Updated: 17:30 hrs. (12:00 GMT) on 10th July , 2024
USD/INR: 83.5250 [FXIR]
Against
USD
INR
1 EUR =
1.0822
90.3908
1 GBP =
1.2808
106.9788
100 JPY =
161.55
51.7023
1 AUD =
0.6740
56.2959
1 CHF =
0.8981
93.0019
Precious Metals
Updated: 17:30 hrs. (12:00 GMT) as on 10th July , 2024
Gold ($/oz)
2384.35
Silver ($/oz)
30.93
Stock Indices
Index Close
09th July , 2024
10th July , 2024
BSE Sensex
80351.64
79924.77
NSE Nifty
2433.20
24324.45
Dow Jones
39291.97
39721.36
NASDAQ
18429.29
18647.45
Major Economic Data Releases for the Day
Date
Region
Time (IST)
Description
11/07/24
11.30 AM
GDP m/m
y/y
06.00 PM
Core CPI m/m
CPI m/m
CPI y/y
Unemployment Claims
30-Y Bond Auction
The views contained herein are those of individuals and not necessarily those of the Bank. This is for information purpose only and no recommendations are intended. While due care has been taken in preparation of this communication, IOB cannot be held responsible for any consequences of any decisions based on this information. Comments/Suggestions may be freely emailed to feddeal@iobnet.co.in