Friday, 7 August 2020
HeadLines
- Dollar nurses losses ahead of non-farm payrolls data
- RBI holds rates on inflation risk, but more easing seen
- Asia shares set to open higher as traders await U.S. payrolls
- Oil settles below 5-month highs amid fuel demand worries
Major Currency Rates at 8:40 AM
Currencies
The dollar nursed losses against major currencies on Friday ahead of the U.S. non-farm payrolls report, which some investors fear could reinforce the view that economic momentum is slowing. Sentiment has turned against the greenback due to a combination of rising U.S. coronavirus infections, a steady decline in Treasury yields, and a lack of consensus in Washington over additional fiscal stimulus.
The dollar index against a basket of major currencies last stood at 92.816, close to a two-year low. Non-farm payrolls due later on Friday are widely expected to show U.S. jobs creation slowed in July from the previous month, indicating a resurgence in coronavirus infections is undermining the world’s largest economy.
RBI Monitory Policy
India’s central bank kept interest rates on hold on Thursday as it sought to contain a rise in retail inflation, though it vowed to keep policy sufficiently loose to help revive growth in the coronavirus-battered economy.
To ease debt strains on companies and lenders, the RBI said it would allow restructuring of corporate and personal loans by banks, a move that was widely awaited by the industry. The repo rate was left at 4.0% and the reverse repo rate at 3.35%, against a median forecast for a 25 bp cut by the market.
USD / INR Technical Analysis
The rupee is likely to open around 74.90.
The Rupee is likely to have resistance at 74.96 (18 Day Moving Average) and 75.16 (50 day moving average) & support at 74.74 (Previous bottoms) and 74.52 (Bollinger Band )
Equity
Asia shares were poised to open higher on Friday, tracking global equity markets’ overnight gains as investors awaited a U.S. nonfarm payrolls report. Singapore Nifty was trading little negative at 11,185 (25 points from last close)
Hong Kong futures HSIc1 were up 0.23% and Nikkei futures were trading above the Nikkei 225 index’s previous close, pointing to an opening advance of 0.14%. The Dow Jones Industrial Average rose 0.68% and the S&P 500 gained 0.64%. The Nasdaq Composite added 1%, marking the fourth straight day of record peaks and closing highs as the tech-heavy index ended the session above 11,000 for the first time. MSCI’s benchmark for global equity markets rose 0.23% to 565.38.
OIL
Oil prices hovered below five-month highs on Thursday, falling after a session in which bearish sentiment about fuel demand counteracted optimism about Iraq’s supply cuts, pushing the benchmarks in and out of positive territory.
Brent crude settled down 8 cents at $45.09 a barrel, while U.S. crude fell 24 cents to $41.95 after a four-day streak of gains.
Source : Reuters
