https://blog.gwcindia.in/wp-content/uploads/2024/03/top-trending-icon1.png Trending
What are the stocks we should invest short term in india 2023? Mutual funds SIP that is enough to accumulate ₹100 crore in 30 years Top 5 -high dividend paying companies for seamless passive income

FX – WEEKLY UPDATE :

FX – WEEKLY UPDATE :
  • By Goodwill
  • 123 Comments
  • December 18, 2023

FX – WEEKLY UPDATE :

WEEKLY SYNOPSIS: 15/12/2023

Currency Map:

Currency Pairs

WEEK CLOSE

PRIOR WEEK CLOSE

% change

USD/INR

83.02

83.38

 -0.42

EUR/INR

91.36

89.89

1.63

GBP/INR

106.12

104.91

1.15

JPY/INR

58.60

57.88

1.24

Brent Crude closed at USD 77 VS prior week close of USD 75.50. Gold closed at USD 2019. Nifty closed at 21456 vs prior week close of 20969. 10 Year G-SEC Yield closed at 7.19%.

Major developments: USDINR traded in the 82.94-83.43 range last week and closed at 83.02, loss of 36 ps for USD as compared to prior week close of 83.38. EUR climbed 1.63% w/w and GBP climbed 1.15 w/w against Rupee. Indian benchmark Equity index climbed 2.32% w/w. 10 Year G-SEC Yield closed at 7.19%. 1-year fwd premia is at 1.68% p.a.

FX reserves stood at USD 606.85 bn as on Dec 1 st.  FX reserves climbed USD 2.81 bn. In Dec, FPI’S have bought Rs 32989 Cr of Equities and bought Rs 9027 Cr of debt . In 2022-23 fiscal year, FII’S have net sold Rs 27593 Cr of Equities and have net bought Rs 838 Cr of debt. On

It was a very interesting Friday as Rupee was allowed to gain on Corporate and FPI related inflows. Broad based USD gain against majors triggered withdrawal of import bids. RBI did not step in to buy USD. In the past few months, FPI’S have been investing heavily and RBI was stemming Rupee gains at 83.26. In a surprise development, RBI stepped aside and this led to sudden Rupee gains to 82.94.

Over the past few weeks, many positives have emerged for Rupee: 1) USD rates have peaked, 2) Crude Oil has been declining, 3) USD is still looking shaky against majors, 4) Heavy FPI inflows.

But for Chinese related worries, threat to Rupee seems to have dissipated.

Decline in US Yields has pushed USDINR fwd premia marginally higher with 1 year premia at 1.68%. Fwd premia could start climbing further as rate differentials favor Rupee over USD. Indian Equities continued to surge on strong IIP numbers and reports of increase in Private capex. With USD rates peaking, markets are enjoying with a breathtaking rally.

On macro data front, trade deficit fell sharply to USD 20.58 bn in Nov as against USD 31.46 bn in Oct. Imports declined to USD 54.48 bn in Nov from USD 65.03 bn in Oct. Exports rose marginally to USD 33.90 bn in Nov from USD 33.57 bn in Oct. in this fiscal, Indian exports is at USD 278.80 bn, down 6.5% y/y , while imports is at USD 445.15 bn, down 8.67% y/y. Meanwhile, services exports, too, has stood still in November at $28.69 billion compared to $28.70 billion in October, and imports fell to $13.40 billion from $14.32 billion in the previous month.

Indian CPI climbed 5.55% in Nov as against 4.87% in Oct. Food inflation rose to 8.7%. Headline inflation is within RBI band of 2 to 6%., IIP climbed 11.7%. Mfrg grew by 10.4%. Mining grew by 13.1% and power output rose 20.4%.

RBI has projected FY 24 inflation to average 5.4%.

Indian PMI(services) declined to 56.9 in Nov from 58.4 in Oct. PMI(mfrg) rose to 56 in Nov from 55.5 in Oct.

Based on the recent Global and Indian macro situation, expect USDINR to trade in the 82.60-83.35 range in coming weeks.

Hedging advise: Imports be hedged closer to 82.80/82.65. Exports be hedged closer to 83.25/83.35.

Global developments: Week was dominated by major Global Central banks rate decisions and statements. USD whipsawed after announcements. USD fell soon after Fed decision, but rebounded on Friday evening as NY Fed President quashed market expectations of March 2024 rate cuts.

Fed has removed rate hike scenario and has signaled that rate has peaked at 5.25-5.5% band. It is also now projecting three rate cuts next year, to 4.6%. This is against two rate cuts projected last time. Fed Chairman said that it is too premature to declare victory against inflation. However, he did not aggressively push back against rate cuts next year. As per Fed, Core PCE is expected to soften to 3.2% this year as against earlier projection of 3.7% and is further expected to drop to 2.4% next year. Unemployment is expected to be 4.1% for next year. GDP is expected to be 2.6% in this year and expected to soften to 1.4% next year.

NY Fed President quashed hopes of March 2024 rate cut. He emphasized Fed’s focus on determining if the current monetary policy is “sufficiently restrictive” to bring inflation back down to the 2% target. He also highlighted the unpredictable nature of economic data, suggesting Fed must be prepared to “tighten the policy further, if the progress of inflation were to stall or reverse.”

US 10 year yield declined to 3.95%. In mid Oct, it was above 5%. Market enthusiasm towards rate cut seems to be much ahead of the curve as US spending, labor market and services data are still strong. US Equities and Global Equities surged on the above developments.

BoE kept Bank Rate unchanged at 5.25%.BOE reiterated its stance that “monetary policy is likely to be restrictive for an extended period of time.” This suggests continued cautious approach towards easing monetary conditions, likely due to persistent inflationary pressures. The Bank further emphasized that “Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures,” indicating readiness to adjust policy should inflation not moderate as expected.

ECB kept interest rates unchanged, maintaining the main refinancing rate at 4.50% and the deposit rate at 4.00%, as was widely anticipated. In a significant update, ECB substantially lowered its headline inflation forecast for 2024 from 3.2% to 2.7%. On the growth front, ECB’s projections indicate modest economic performance, with growth averaging 0.6% for 2023, 0.8% for 2024. ECB reiterated that the current interest rates are positioned to substantially contribute to bringing inflation back to its target, provided they are “maintained for a sufficiently long duration.” The ECB plans to continue following a “data-dependent approach” to determine the “level and duration” of policy restrictions.

ECB President in her post-meeting press conference, made it clear that the governing council did not discuss a rate cut in their meeting. She underlined the ECB’s vigilance, asserting the need to “keep our guard up” and closely monitor data to ascertain if the recent decline in inflation is sustainable.

ECB member said that rate hikes are over, but it is too premature to talk about rate cuts.

EU PMI Composite index decreased from 47.6 to 47.0. This ongoing contraction underscores the challenges facing the Eurozone economy, with a high likelihood that it has been in a recession since the third quarter.

UK PMI(composite) rose to 51.7 from 50.7, 6 months high. Chief Business Economist at S&P Global Market Intelligence, commented, “The UK economy continues to dodge recession, with growth picking up some momentum at the end of the year to suggest that GDP stagnated over the fourth quarter as a whole.” He also highlighted the dual-speed nature of the UK economy, with manufacturing contracting sharply while services, particularly financial services, showed signs of growth.

Based on the vacillating comments from Fed, ECB and BOE members, expect Cross Currency consolidation to happen with no two way clear movement till the path of rate differential becomes more certain.

Currency technical levels: USDINR: 82.80/82.65 (Supports), 83.25/83.40 (resistance),

EURINR:91.80(Resistance),89.50/88.75(Support),

GBPINR: Supports: 104.20/103.40( supports), Resistance:106.50(Resistance).

JPYINR: Resistance:59, Supports: 57.45/56.45 (support).

Hedging advise: USDINR imports be hedged on decline to 82.80/82.60. EUR and GBP exports can be covered.

Click to open an Account : https://ekyc.gwcindia.in/client/
For all your investment needs feel free to reach us.
Give us Missed Call us on 90037 90027 . For Support : 044-40329999

Comments

  1. Factory expertise
    December 20, 2023
    Reply

    يتضح التزام إيليت بايب Elite Pipe بإرضاء العملاء في جداول التسليم الفوري وخدمة ما بعد البيع الاستثنائية.

  2. HDPE pipe services in Iraq
    December 21, 2023
    Reply

    The Elitepipe Plastic Factory’s manufacturing facilities are equipped with state-of-the-art machinery, enabling efficient production processes and consistent product quality. Elitepipe Plastic Factory

  3. Pipe fittings manufacturer
    January 1, 2024
    Reply

    Usually I do not read article on blogs, however I would like to say that this write-up very compelled me to take a look at and do it! Your writing style has been amazed me. Thank you, very nice article.

  9. Lqhlfd
    January 13, 2024
    Reply

    antihistamine nasal spray canada buy claritin pill kirkland allergy pills toronto

  17. Ddzeoq
    February 4, 2024
    Reply

    order amoxil 500mg for sale amoxil ca buy amoxil 500mg online

  25. Rhrrot
    February 11, 2024
    Reply

    furosemide drug buy lasix furosemide 100mg tablet

  68. Dvbvgt
    March 14, 2024
    Reply

    ciprofloxacin without prescription – bactrim cheap buy cheap generic clavulanate

  71. Vyjyed
    March 14, 2024
    Reply

    ciprofloxacin 500mg usa – septra drug cost augmentin 1000mg

  73. Tkyvhr
    March 17, 2024
    Reply

    buy flagyl cheap – cefaclor ca order zithromax pills

  74. Wbcwbq
    March 17, 2024
    Reply

    flagyl 200mg canada – cefaclor order purchase azithromycin generic

  77. Zqfldb
    March 19, 2024
    Reply

    order valacyclovir pill – nemasole us zovirax for sale online

  80. Kbnbtm
    March 21, 2024
    Reply

    where to buy metronidazole without a prescription – cheap amoxil for sale order azithromycin online cheap

  82. Sfnphe
    March 23, 2024
    Reply

    purchase furosemide sale – buy prazosin buy captopril generic

  87. Zqozig
    March 27, 2024
    Reply

    buy clozaril pills – pepcid 40mg us buy cheap generic famotidine

  88. Gxxndi
    March 28, 2024
    Reply

    buy clozaril without a prescription – cheap frumil 5 mg buy pepcid 40mg generic

  93. Stkazc
    March 31, 2024
    Reply

    buy hydroxyzine 10mg without prescription – pamelor price buy generic endep 10mg

  94. Doxvju
    March 31, 2024
    Reply

    buy atarax 25mg online cheap – endep 25mg us order endep 25mg generic

  95. Lkclmk
    April 3, 2024
    Reply

    augmentin 1000mg us – generic baycip buy ciprofloxacin 500mg pills

  110. Yoinni
    April 17, 2024
    Reply

    micronase price – forxiga pills order dapagliflozin 10 mg online

  113. Rcwgfm
    April 19, 2024
    Reply

    glycomet 500mg over the counter – precose price precose 50mg cost

Leave a Reply

Your email address will not be published. Required fields are marked *