Monday, 3 August 2020
HeadLines
- Dollar on defensive as U.S. recovery story in doubt
- Asia stocks cautiously mixed
- Oil edges lower on oversupply concerns as OPEC+ set to raise output
Major Currency Rates at 8 AM
Currencies
The U.S. dollar ticked up in early Monday trade, clinging to its rebound late last week, but mounting concerns about a slowing U.S. economic recovery from coronavirus epidemic kept a lid on gains.
The dollar’s decline is likely to continue. Real U.S. interest rates are declining even as the country is running a big current account deficit, a situation we hadn’t have for a long time. U.S. bond yields have fallen to their lowest level since the market turmoil in March triggered by the pandemic, with the 10-year yield slipping to near 0.50%, undermining the yield attraction of the dollar.
USD / INR Technical Analysis
The rupee is likely to open Flat around 74.91.
The Rupee is likely to have resistance at 75.36 (Bollinger Band) and 75.58 (100 Day Moving Average) and support at 74.76 (7 day and 14 day Moving Average) and 74.51 (Bollinger Band).
Equity
Asian share markets turned mixed on Monday as U.S. lawmakers struggled to hammer out a new stimulus plan amid a global surge of new coronavirus cases, though a squeeze on crowded short positions gave the dollar a rare bounce.
Sentiment was helped by a survey showing China’s factory activity expanded at the fastest pace in nearly a decade in July, with the Caixin/Markit PMI at 52.8. That lifted Chinese blue chips 0.9%. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2%, though that was from a six-month top.Japan’s Nikkei added 2.1% courtesy of a pullback in the yen, while South Korea shares were flat.E-Mini futures for the S&P 500 inched up 0.1%, while EUROSTOXX 50 futures and FTSE futures were little changed.
OIL
Oil prices fell on Monday on concerns about oversupply as OPEC and its allies, together known as OPEC+, are due to pull back from production cuts in August while an increase in COVID-19 cases worldwide raised fears of slower pick-up in fuel demand.
Brent crude futures slid 8 cents, or 0.2%, to $43.44 a barrel by 0001 GMT while U.S. West Texas Intermediate (WTI) crude futures were down 12 cents, or 0.3%, at $40.15 a barrel.
Source : Reuters
