Morning Report


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Thursday, 30 July 2020

HeadLines

  • Dollar bogged at two-year low as Fed maintains dovish script
  • Federal Reserve sees dim economic outlook as coronavirus squeezes economy, keeps rate unchanged
  • Asian stocks set to rise on Fed policy, dollar hits two-year low
  • Oil edges up after sharp U.S. crude inventory drop

Major Currency Rates at 8 AM

Currencies

The dollar was mired at a more than two-year low on Thursday as the Federal Reserve repeated a pledge to limit damage from the pandemic as surging new coronavirus cases hamper the economy.

The dollar has been tumbling on expectations that the Fed will continue its ultra loose monetary policy for years to come and on speculation that it will allow inflation to run higher than it has previously indicated before raising interest rates. The dollar index fell 0.52% on Wednesday and steadied at around 93.275, its lowest in more than two years.

he dollar index against a basket of currencies gained 0.18% to 93.71, after dropping to 93.47 on Monday, the lowest since June 2018.

FED Policy

The Federal Reserve is expressing concern that the viral outbreak will act as a drag on the economy and hiring in coming months and that it plans to keep its benchmark short-term interest rate pegged near zero.

The Fed announced no new policies in its statement. The central bank said it will also continue to buy about $120 billion in Treasury and mortgage bonds each month, which are intended to inject cash into financial markets and spur borrowing and spending.

We expect that this loose monetary policy will keep dollar on back foot and the liquidity injection will keep the Equity markets in the Current Bull run. 

USD / INR Technical Analysis

USD / INR Daily Chart

The rupee is likely to open  around  74.92.

The Rupee is likely to have strong resistance at 75.36 (Bollinger Band)  and 75.56 (100 Day Moving Average)  and support at  74.76 (7 day Moving Average) and 74.50 (double bottom).

Equity

Asian stocks were set to track an upbeat Wall Street session on Thursday after the Federal Reserve kept interest rates at ultra-low levels, while the U.S. dollar fell to a two-year low.

The Dow Jones Industrial Average on Wednesday ended 0.6% higher, the S&P 500  gained 1.24% and the Nasdaq Composite added 1.35%. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.28%, while its global stock index rose 0.81%. Australian S&P/ASX 200 futures  were up 0.9% while Japan’s Nikkei 225 futures were down 0.04%. Hong Kong’s Hang Seng index futures  rose 0.14%.

Singapore nifty SGX was trading plus 25 points  at 11,240 at 8 AM IST. Indian Equities are likely to be volatile due to Expiry today.

OIL

Oil prices rose on Wednesday after a steep drop in U.S. crude inventories, but another record day for coronavirus cases worldwide kept gains in check.

Brent crude futures settled at $43.75 a barrel, up 53 cents, or 1.2%. U.S. West Texas Intermediate crude futures CLc1 settled at $41.27 a barrel, gaining 23 cents, or 0.6%.

U.S. crude oil inventories fell by 10.6 million barrels last week to 526 million barrels, the Energy Information Administration said, the largest drawdown since December. 

Source : Reuters

Morning Report


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Wednesday, 22 July 2020

HeadLines

  • Dollar licks wounds as investors fret over U.S. stimulus
  • Asia markets to open lower on pandemic worries, shrugging off U.S. equities upswing
  • Oil prices fall on U.S. inventory build, increasing pandemic fears

Currencies

The dollar nursed losses against most currencies, undermined by concern that Republicans and Democrats are struggling to reach consensus on the next round of U.S. economic stimulus measures.

The euro traded near its strongest level in more than a year on Wednesday after European leaders agreed a stimulus plan to fuel recovery from the economic drag caused by the COVID-19 pandemic. Risk appetite has improved greatly this week as progress in developing vaccines for the novel coronavirus reduced the U.S. dollar’s safe-harbour appeal.

USD / INR Technical Analysis

USD / INR Daily Chart

The rupee is likely to open  stronger around  74.54 due to dollar weakness across the Globe.

The Rupee is likely to have resistance at 74.94 (14 Day Moving Average)  and 75.02 (7 Day moving average)  and support at  74.41 (Bollinger Band)

Equity

Asia shares were set to open lower on Wednesday after U.S. President Donald Trump’s comments regarding the country’s surge in novel coronavirus cases outweighed a slight rally on Wall Street.

Australian S&P/ASX 200 futures lost 1.06% in early trading. Japan’s Nikkei 225 futures added 0.24%, while Hong Kong’s Hang Seng index futures lost 0.34%. E-mini futures for the S&P 500 rose 0.13%.

SGX Nifty is reading Flat at 11,184. It has support at 10,850 and resistance at 11,200.

OIL

Oil prices fell on Wednesday as industry data showed a bigger- than-expected inventory build in the United States where coronavirus cases continue to climb, potentially further denting demand in the world’s biggest oil consumer.

U.S. crude inventories rose last week by 7.5 million barrels compared with expectations for a draw of 2.1 million. Brent crude fell 32 cents, or 0.7%, to $44 a barrel, and U.S. West Texas Intermediate (WTI) crude dropped 33 cents, or 0.8%, to $41.59.

Source : Reuters

#Report , #Commentary, #Currency, #Equity, #Oil, #USDINR, #NIFTY

Markets at a Glance


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Tuesday, 21 July 2020

HeadLines

  • EU progress and vaccine hopes keep pressure on dollar
  • Asian markets set to track U.S. gains on vaccine, EU deal hopes
  • Oil steady as vaccine news counters rise in virus cases

Currencies 

Progress toward both a coronavirus vaccine and a fiscal rescue package in Europe put the dollar under pressure and supported commodity currencies and the euro on Tuesday. European Union leaders appear close to an agreement on a massive stimulus plan for the bloc as the summit drags beyond a fourth day. 

Hopes for a breakthrough pushed the euro  to a four-month high of $1.1467 and it held just below that level at $1.1460 in Asian trade. Against a basket of currencies  the dollar traded at a more than four-month low of 95.687 

USD / INR Technical Analysis 

USD / INR Daily Chart

The rupee is likely to open  stronger around  74.76 due to rally in riskier assets.

The Rupee is likely to have resistance at 75.01 (14 Day Moving Average)  and 75.11 (7 Day moving average)  and support at  74.47 (Bollinger Band)

Equity

Asian shares were set to open higher on Tuesday after U.S. markets gained ground on positive data from trials of three potential COVID-19 vaccines and hopes that the European Union would finalise a recovery fund.

Australian S&P/ASX 200 futures rose 0.70% in early trade while Japan’s Nikkei 225 futures were up 0.02%, or 0.47% higher than the Nikkei’s close on Monday.Hong Kong’s Hang Seng index futures rose 0.92%. E-mini futures for the S&P 500 slipped 0.08%. The Dow Jones Industrial Average rose 0.03%, the S&P 500 gained 0.84% and the Nasdaq Composite jumped 2.51%.

OIL

Oil prices were little changed on Tuesday, trapped in the narrow trading band of the past three weeks as investors gauged hopes for a recovery in oil demand against fears of new lockdowns due to a growing number of coronavirus cases.

Brent futures were up 15 cents, or 0.4%, at $43.43, while West Texas Intermediate (WTI) edged up 2 cents to $40.83.

Source : Reuters

#Report , #Commentary, #Currency, #Equity, #Oil, #USDINR, #NIFTY

Markets at a glance


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Monday, 20 July 2020

Currency Rates at 8 : 00 AM IST
  • Euro hovers near four-month peak as market looks to EU summit
  • Asian shares defensive; eyes on EU summit, U.S. stimulus talks
  • Oil falls as worsening pandemic threatens recovery

Currencies

The euro hovered near four-month highs against the dollar on Monday as investors held on to hopes that European leaders would break a deadlock and hammer out an economic rescue deal as their marathon summit reached a record length.

The dollar is broadly weak as investors maintained strong risk appetite, betting on more stimulus not just from Europe but also the United States.The dollar index  stood at 95.949, near three-month low of 95.716 touched last month.

Our View on USD / INR

Daily Chart – USD / INR

The rupee is likely to open  stronger around  74.90 due to rally in riskier assets.

The Rupee is likely to have resistance at 75.02 (14 Day Moving Average)  and 75.14 (7 Day moving average)  and support at  74.52 (Bollinger Band)

Equity

Asian shares began warily on Monday as investors eyed efforts to stitch together more fiscal stimulus in the eurozone and United States to help economies ride out the effects of a record jump in COVID-19 cases globally.

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat at 541.49, with Australian shares down 0.3% and South Korea’s KOSPI just a shade higher. Japan’s Nikkei was up 0.1%.E-minis for the S&P 500 rose 0.1% in early Asian trading.

OIL

Oil prices dipped on Monday, weighed down by the prospect that a rise in the pace of coronavirus infections could derail a recovery in fuel demand.

Brent crude was down 10 cents, or 0.2%, at $43.04 a barrel, after dropping slightly last week. U.S. oil was off by 6 cents, or 0.2%, at $40.53 a barrel, after gaining 4 cents last week.

Source : Reuters

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