CURRENCY WEEKLY SYNOPSIS
{31-12-18 To 04-01-19}
|
Currency Pairs |
WEEKLY CLOSE |
PRIOR WEEK CLOSE |
% change |
|
EUR/INR |
79.25 |
80.03 |
-0.97 |
|
GBP/INR |
88.53 |
88.78 |
-0.28 |
|
JPY/INR |
0.6424 |
0.6341 |
1.31 |
|
USD/INR |
69.73 |
69.93 |
-0.28 |
Major highlights: Rupee gained 0.28% to close at 69.73. Volatility is subsiding.
Equity markets withstood global meltdown. Bond yields traded steady.
-RBI announced debt restructuring norms for MSME’S with turnover less than Rs 25 Cr.
-FII’S have sold Rs 1037 Cr of Indian Equities in Jan till date . FII’S have bought Rs 1114 Cr of
Indian debt securities in Jan till date .
-Auto sales was tepid in Dec.
-Indian IIP and CPI are due for release in coming week. If CPI is below 3.5%, RBI may cut rates in Feb.
-Crude climbed last week. WTI Crude is now at USD 48.30 and Brent Crude is now at USD 57.40. Gold rallied significantly.
-Global Equities led by US slumped early last week. However, a swift recovery took place on
Friday.
-US Treasury yields declined further. 10 Year yield is now at 2.54%. US Govt is in a partial
shut down mode as Congress refused to fund schemes related to construction of border
wall with Mexico.
-US and China announced dates for trade talks.
-China lowered reserve requirement for banks by 100 bps to support sagging economy.
-Fed Chairman indicated that Fed could be flexible and patient towards further rate hikes due to Chinese led Global slow down and sagging US ISM (mfrg) data. However, US added 312k jobs in Dec, allaying fears of slow down.
Next week important events: US ISM(non mfrg), FOMC minutes, Indian CPI and IIP.
Projected range for coming week: USDINR: 69.35-70.50, EURINR:79-81, GBPINR:87-91.
Suggestions: Hedge USD receivables on rally to 71. USD payables can be hedged.
EURINR payables can be hedged at 79.
