15 June 2015

Dollar gave its first weekly close above 64 since Nov 2013:: Edelweiss

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The week that was...
  • Rupee closed the week on weak node its lowest weekly close above $64 since nov 2013 weakness in domestic equity and bond market in coupled with gains in US Dollar as well as uncertainty over Greece kept the local currency and equity under stress. India`s foreign exchange reserves including gold and Special Drawing Rights stood at $352.71 billion in week to Jun 5, up 239.4 million on week, the Reserve Bank of India`s Weekly Statistical Supplement showed Friday. India’s Broader NSE index close at its lowest level in 8 month below the important 8000 mark. 10-year benchmark yields to over six-month high on selling by Primary Dealers and foreign banks post a devolvement at the weekly bond auction and also on caution ahead of the release of retail inflation data.
  • India`s retail inflation accelerated at a higher pace in May on rise in pulses and fuel prices, data released by the government . India`s Consumer Price Index-based inflation accelerated to 5.01% in May from 4.87% in April. India`s IIP expands 4.1% in Apr vs 2.10% growth a month earlier.
  • Greenback ended the week lower against the other major currencies on Friday as uncertainty over whether the Federal Reserve will offer fresh indications on the timing of interest rate hikes at its upcoming policy meeting weighed. Data on Friday showed that U.S. consumer confidence improved in June as signs of improvement in the labor market spurred expectations for wage gains.
  • Setback in Greek debt talks pushed U.S. and European shares lower last week , while expectation of positive U.S. data may accelerate the timing for a hike in interest rates. Oil prices fell on concerns production may rise further.
Currency Outlook for This Week
  • Indian Rupee likely to remain under pressure after giving its lowest weekly close since Nov 2013 against the US Dollar . Dollar demand by oil importers in coupled with uncertainty over rate hike with most of the market participants were waiting for the outcome of two day FOMC policy due on 16-17 June will provide further direction.
  • Uncertainty over Greece debt default in coupled with better than expected US Data will keep the rupee under pressure. Market will look after the movement in domestic equity and bond post the release of CPI number as well as the movement in countries monsoon.
  • USDINR Spot likely to trade with positive bias for the week with the range between 63.70-65.00

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