Global developments

The risk sentiment has deteriorated overnight on the escalation in tensions between the West and Russia on Ukraine. Russia ordered troops to be sent to the separatist-controlled areas in Eastern Ukraine. This may likely invoke a response from the US in the form of new sanctions. Safe havens have rallied overnight. Yields on US treasuries have dropped about 7-8bps at the longer end. There is a chance that the Fed may recalibrate its tightening plans given the risks to growth from geopolitical tensions. Crude has surged about 3.5% to USD 97 per barrel. Gold has crossed the USD 1900 mark amid risk aversion. Safe haven currencies JPY and CHF have strengthened. The dollar is otherwise stronger against the commodity, EM, and Asian currencies. US equities were shut yesterday for a holiday. Asian equities are lower with Shanghai down 1.5% and HangSeng lower by 3.3%.

Domestic developments

Equities

The Nifty ended 0.4% lower yesterday at 17206.

Bonds and rates

Gsec yields ended a couple of basis points higher across the curve yesterday with the yield on the benchmark 10y ending at 6.70%. Today the impact of lower US treasury yields could be offset by higher crude prices. Money market rates could be higher by around 5-7bps on account of the Sell-Buy USD/INR swap announced by the RBI as it would withdraw liquidity from the banking system.

USD/INR

The Rupee has strengthened yesterday to 74.35 at one point before the nationalized banks stepped in aggressively to buy Dollars likely on behalf of the RBI. Rupee eventually ended the session at 74.51. The RBI announced a 2y USD/INR Sell-Buy swap for USD 5bn yesterday. We could see the 1y forward spike by around 12-15bps to around 4.20% as a result of the announcement. We expect it to trade a 74.60-74.90 range with an upside bias.

Strategy: Exporters are advised to cover near 75.10 levels. Importers are advised to cover on dips towards 74.30-40 The 3M range for USDINR is 74.30 – 76.40 and the 6M range is 73.50 – 76.50. 

fxsoriginal

fxsoriginal

Download The Full Daily Currency Insight

This report has been prepared by IFA Global. IFA Global shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. IFA Global nor any of directors, employees, agents or representatives shall be held liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. No liability whatsoever is accepted for any loss arising (whether direct or consequential) from any use of the information contained in this report. This statement, prepared specifically at the addressee(s) request is for information contained in this statement. All market prices, service taxes and other levies are subject to change without notice. Also the value, income, appreciation, returns, yield of any of the securities or any other financial instruments mentioned in this statement are based on current market conditions and as per the last details available with us and subject to change. The levels and bases of, and reliefs from, taxation can change. The securities / units / other instruments mentioned in this report may or may not be live at the time of statement generation. Please note, however, that some data has been derived from sources that we believe to be reliable but is not guaranteed. Please review this information for accuracy as IFA Global cannot be responsible for omitted or misstated data. IFA Global is not liable for any delay in the receipt of this statement. This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IFA Global to any registration or licensing requirements within such jurisdiction. The information given in this report is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. IFA Global reserves the right to make modifications and alterations to this statement as may be required from time to time. However, IFA Global is under no obligation to update or keep the information current. Nevertheless, IFA Global is committed to providing independent and transparent information to its client and would be happy to provide any information in response to specific client queries. Neither IFA Global nor any of its directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. The information provided in these report remains, unless otherwise stated, the copyright of IFA Global. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright IFA Global and may not be used in any form or for any purpose whatsoever by any party without the express written permission of the copyright holders.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD trades at yearly lows below 1.0500 ahead of PMI data

EUR/USD trades at yearly lows below 1.0500 ahead of PMI data

EUR/USD stays on the back foot and trades at its lowest level since October 2023 below 1.0500 early Friday, pressured by persistent USD strength. Investors await Manufacturing and Services PMI surveys from the Eurozone, Germany and the US.

EUR/USD News
GBP/USD falls to six-month lows below 1.2600, eyes on key data releases

GBP/USD falls to six-month lows below 1.2600, eyes on key data releases

GBP/USD extends its losses for the third successive session and trades at a fresh fix-month low below 1.2600. This downside is attributed to the stronger US Dollar (USD) as traders continue to evaluate the Fed's policy outlook following latest data releases and Fedspeak.

GBP/USD News
Gold rises toward $2,700, hits two-week top

Gold rises toward $2,700, hits two-week top

Gold continues to attract haven flows for the fifth consecutive day and rises toward $2,700. XAU/USD continues to benefit from risk-aversion amid intensifying Russia-Ukraine conflict. Investors keep a close eye on geopolitics while waiting for PMI data releases. 

Gold News
Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally

Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally

Ethereum (ETH) is trading near $3,350, experiencing an 10% increase on Thursday. This price surge is attributed to strong bullish sentiment among derivatives traders, driving its open interest above $20 billion for the first time. 

Read more
A new horizon: The economic outlook in a new leadership and policy era

A new horizon: The economic outlook in a new leadership and policy era

The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Majors

Cryptocurrencies

Signatures