FX Market Insight
USD/INR Spot reference 78.0550:
Yesterday, the USD/INR opened at 78.0300, down from the previous day’s close of 78.0650. Following a reopening, the pair began to rise slowly and steadily, tracking very strong negative sentiment in the equity market. However, because to the presence of RBI in the market, the pair was unable to cross the 78.11 zone. The pair traded both ways in the afternoon session, reaching a high of 78.0975 before settling at 78.0700 levels.
USD/INR Price Action and Technical
The daily chart’s loss of trend strength suggests that the price should remain below the 78.3150 levels. Short-term support at 78.00 has a chance of holding, allowing for a return to 78.1075 and 78.28. Staying below 78.00 would be interpreted as a sign of weakness, and the price might drop to the 77.9000 and 77.8050 levels. The chart is more likely to turn bearish below 77.8050. To alleviate part of the bearishness, it must move over 78.3150. An unexpected advance above 78.3150 could boost the likelihood of the rally continuing to 78.4975 levels. 77.9750 would provide immediate support, followed by 77.9000. Near 78.1075 and 78.2800, resistance exists.
For the day, the range is 77.9000 to 78.2800.
On Friday, the yen fell substantially from its highest level in over two weeks, indicating that the Bank of Japan is likely to maintain its ultra-easy monetary policy, despite pressure from peers such as the Federal Reserve and the Swiss National Bank to tighten.
The dollar recovered from a one-week low against major rivals after a two-day slump following the Federal Reserve’s mid-week rate hike, which, while the largest since 1995, fell short of market expectations.
The dollar index, which compares the greenback to six other currencies including the yen, increased 0.16 percent to 104.05 after falling to its lowest level since June 10 at 103.41 overnight. Prior to the Fed’s decision, it was at a two-decade high of 105.79.
The dollar rose 0.82 percent to 133.235 yen after falling below 131.49 overnight for the first time since June 6. The dollar rose 0.3 percent to 0.96905 Swiss francs after plunging to its lowest level in seven years overnight after the Swiss National Bank startled markets with a half-point rate hike.
The dollar rose 0.3 percent to 0.96905 Swiss francs after plunging to its lowest level in seven years overnight after the Swiss National Bank startled markets with a half-point rate hike.
Sterling fell 0.27 percent to $1.2318, giving up a portion of its 1.43 percent gain overnight after the Bank of England chose to raise interest rates again, albeit by a smaller amount than many had expected, but signalled hawkish policy action in the future.
The euro fell 0.17 percent to $1.0537, slipping from a one-week high overnight, as it benefited from the European Central Bank’s move mid-week to provide new support to southern countries to keep borrowing costs low.
Equity Market Insight
Indian indices opened lower on June 17 with Nifty below 15300 amid weak global cues.
At 09:16 IST, the Sensex was down 392.29 points or 0.76% at 51103.50, and the Nifty was down 116.20 points or 0.76% at 15244.40. About 522 shares have advanced, 1297 shares declined, and 86 shares are unchanged.
As investors assess the potential of aggressive monetary policy tightening leading to a recession, Asian stocks were down in Friday early trade, following steep drops on Wall Street.
In Japan, the Nikkei 225 sank 2.32 percent, while the Topix index fell 2.25 percent. The Kospi index in South Korea fell 1.17 percent.
In early trading in Hong Kong, the Hang Seng index fell 0.61 percent. Mainland The Shanghai Composite Index fell 0.55 percent, while the Shenzhen Component fell 0.639 percent.
The S&P/ASX 200 index fell 2.32 percent in Australia. In Singapore, the Straits Times index fell by approximately 0.2 percent.
Outside of Japan, MSCI’s broadest index of Asia-Pacific stocks fell 0.82 percent.
Overnight, Wall Street stocks plummeted, with the S & P 500 losing 3.25 percent to 3,666.77. To 29,927.07, the Dow Jones Industrial Average fell 741.46 points, or 2.42 percent. The Nasdaq Composite fell 4.08 percent to 10,646.10, trailing the S& P 500.
Oil prices fell slightly on Friday as demand concerns arose following interest rate hikes earlier in the week, while the decline was limited by new penalties on Iran.
Brent crude prices slid 47 cents, or 0.4 percent, to $119.34 a barrel, while WTI crude futures in the United States fell 57 cents, or 0.5 percent, to $117.02 a barrel.
Brent crude futures would witness their first weekly decline in five weeks if losses hold through the day, while U.S. crude futures would see their first weekly dip in eight weeks.
Gold fell on Friday, as a higher dollar and rising U.S. Treasury yields weighed on demand for greenback-priced bullion, and put prices on track for their biggest weekly drop since mid-May.
Spot gold dropped 0.7% to $1,844.25 per ounce by 0238 GMT. U.S. gold futures dipped 0.2% to $1,846.90.
Major Economic Events
Friday, Jun 17, 2022
BoJ Press Conference
CPI (MoM) (May)
CPI (YoY) (May)
Fed Chair Powell Speaks
Industrial Production (MoM) (May)
Fed Monetary Policy Report
Disclaimer: All information in this report is collected from various sites on the internet. Although we have taken all precautions for the correct representation of data however we do not take any responsibility for any errors and omissions. The technical analysis and views expressed are the author’s own views. We are not responsible for any losses on account of following the same.