{"id":5498,"date":"2024-01-29T09:35:52","date_gmt":"2024-01-29T04:05:52","guid":{"rendered":"https:\/\/gwcindia.in\/blog\/\/?p=5498"},"modified":"2024-09-02T10:32:37","modified_gmt":"2024-09-02T05:02:37","slug":"fx-weekly-currency-score-week-5","status":"publish","type":"post","link":"https:\/\/www.gwcindia.in\/blog\/fx-weekly-currency-score-week-5\/","title":{"rendered":"FX – WEEKLY UPDATE :"},"content":{"rendered":"

FX Weekly Currency Score Week 5<\/span><\/h1>\r\n

WEEKLY SYNOPSIS: 26\/01\/2024<\/b><\/p>\r\n

Currency Map:<\/b><\/b><\/b><\/p>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
\r\n

Currency Pairs<\/b><\/p>\r\n<\/td>\r\n

\r\n

WEEK CLOSE<\/b><\/p>\r\n<\/td>\r\n

\r\n

PRIOR WEEK CLOSE<\/b><\/p>\r\n<\/td>\r\n

\r\n

% change<\/b><\/p>\r\n<\/td>\r\n<\/tr>\r\n

\r\n

USD\/INR<\/b><\/b><\/p>\r\n<\/td>\r\n

\r\n

83.11<\/b><\/b><\/p>\r\n<\/td>\r\n

\r\n

83.08<\/b><\/b><\/p>\r\n<\/td>\r\n

\r\n

\u00a00.03<\/b><\/b><\/p>\r\n<\/td>\r\n<\/tr>\r\n

\r\n

EUR\/INR<\/b><\/p>\r\n<\/td>\r\n

\r\n

90.41<\/b><\/p>\r\n<\/td>\r\n

\r\n

90.45<\/b><\/p>\r\n<\/td>\r\n

\r\n

\u00a0<\/b><\/p>\r\n<\/td>\r\n<\/tr>\r\n

\r\n

GBP\/INR<\/b><\/b><\/p>\r\n<\/td>\r\n

\r\n

105.65<\/b><\/b><\/p>\r\n<\/td>\r\n

\r\n

105.56<\/b><\/b><\/p>\r\n<\/td>\r\n

\r\n

0.08<\/b><\/b><\/p>\r\n<\/td>\r\n<\/tr>\r\n

\r\n

JPY\/INR<\/b><\/p>\r\n<\/td>\r\n

\r\n

56.23<\/b><\/p>\r\n<\/td>\r\n

\r\n

55.90<\/b><\/p>\r\n<\/td>\r\n

\r\n

0.59<\/b><\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n

Brent Crude closed at USD 83.60 VS prior week close of USD 78.75. Gold closed at USD 2018. Nifty closed at 21352 vs prior week close of 21622. 10 Year G-SEC Yield closed at 7.18%.<\/span><\/b><\/b><\/p>\r\n

Major developments<\/span><\/b>: USDINR traded in the 83.06-83.18 range in a truncated trading week and closed at 83.11, gain of 3 ps for USD as compared to prior week close of 83.08. EUR closed flat w\/w and GBP climbed 0.08 w\/w against Rupee. Indian benchmark Equity index declined 0.98 w\/w. 10 Year G-SEC Yield closed at 7.18%. 1-year fwd premia is at 1.87% p.a.<\/span><\/b><\/a><\/a><\/a><\/a><\/span><\/b><\/p>\r\n

<\/a>In Jan, FPI\u2019S have sold Rs 36036 Cr of Equities and bought Rs 16951 Cr of debt . In\u00a0<\/span><\/b>last calendar year, FII\u2019S have net bought Rs 172853 Cr of Equities and have net bought Rs 70489 Cr of debt.<\/span><\/b><\/p>\r\n

FX reserves stood at USD 616 bn, as on Jan 19 th. Reserves declined by USD 2.93 bn w\/w.<\/span><\/b><\/p>\r\n

Indian merchandise trade deficit decreased to $19.8 billion in December 2023 from $23.14 billion in the same month the previous year. Imports totalled USD USD 58.25 and exports was at USD 38.45 bn.<\/span><\/b>\u00a0<\/span>The merchandise trade deficit improved by 11.45% from USD 212.34 billion in April-December 2022 to USD 188.02 billion in April-December 2023. The overall trade deficit improved by 35.87% from USD 108.13 billion in 2022 to USD 69.34 billion in 2023.\u00a0<\/span><\/b><\/p>\r\n

Rupee continues to be range bound and is expected to trade in the 82.80-83.35 range for some more months. There is no clear theme in Global FX markets. However, with US inflation trending down in a sustained manner and with very little signs of negative impact of US tighter monetary policy on US growth and employment, Fed may bring forward rate cuts to second quarter. This may have positive implications for inflows into Indian debt and equity markets and support Rupee.<\/span><\/b><\/b><\/p>\r\n

Hedging advise<\/b>: Imports be hedged closer to 82.80. Exports be hedged closer to 83.17\/83.35.<\/b><\/b><\/p>\r\n

Global developments<\/span><\/b><\/a><\/a><\/a><\/a>:\u00a0<\/span><\/b><\/a>Strong US GDP, robust jobs growth and declining inflation has set a perfect stage for this week\u2019s Fed meeting. Fed could hint at rate cut move in this week\u2019s meeting. Fed\u2019s inflation indicator- Core PCE index is averaging now at 1.9% annualised in last 6 months and is below 2% objective. This could encourage Fed to offer clues for rate cuts. It is surprising that tighter monetary policy has brought a downtrend in inflation without affecting consumer spending and jobs.<\/span><\/b><\/p>\r\n

US GDP in the fourth quarter expanded at a 3.3% annualized rate, topping expectations for a more run-of-the-mill 2.0% increase.\u00a0Residential investment notched a second straight increase in a sign housing activity has bottomed, while government spending plowed ahead at a 3.3% clip. Business investment also picked up over the quarter, including a rebound in equipment spending. December orders of durable goods, also released this week, signaled capex growth should continue in the near term.\u00a0Real consumer spending grew 2.8% annualized in Q4, barely slowing from the third quarter’s impressive 3.1%.<\/span><\/b>\u00a0<\/span>The PCE deflator excluding food and energy\u2014the FOMC’s preferred gauge of the recent trend in inflation\u2014rose a rather tame 0.2% in December. Over the past six months, core PCE inflation has risen at a 1.9% annualized pace, a touch lower than the central bank’s target of 2.0%.<\/span><\/b><\/p>\r\n

ECB reiterated that it \u201cconsiders that the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution\u201d toward returning inflation to its 2% medium-term target in a timely manner. The ECB also again highlighted a data-dependent approach to conducting monetary policy. On that front, the ECB said the declining trend in underlying inflation has continued and that past interest rate increases continue to be transmitted forcefully into financing conditions.<\/span><\/b><\/p>\r\n

Bundesbank issued a cautionary message about China\u2019s current economic struggles and their potential impact on Germany. The report notes that China is grappling with \u201csignificant economic problems,\u201d and the relationship between China and Western industrial nations has \u201cnoticeably deteriorated recently.\u201d Such geopolitical risks, if they materialize, could have severe repercussions for the German economy.<\/span><\/b><\/p>\r\n

EU<\/span><\/b>\u00a0<\/span>PMI Composite rose from 47.6 to 47.9, a 6-month high.<\/span><\/b>\u00a0<\/span>UK<\/span><\/b>\u00a0<\/span>PMI Composite rose from 52.1 to 52.5, a 7-month high.<\/span><\/b>\u00a0<\/span>\u00a0Chief Business Economist at S&P Global Market Intelligence, noted that UK business activity growth has \u201caccelerated for a third straight month\u201d. He described this as a \u201cpromising start\u201d to the year.<\/span><\/b><\/p>\r\n

BoJ left monetary policy unchanged as widely expected.<\/span><\/b><\/p>\r\n

People’s Bank of China (PBoC) announced a reduction in its Reserve Requirement Ratio (RRR) to ease domestic liquidity conditions.<\/span><\/b><\/b><\/p>\r\n

US Fed meeting, BOE MPC meeting, US employment data and ISM(mfrg) are important events for the week.<\/span><\/b><\/b><\/p>\r\n

\u00a0<\/span><\/b>Currency technical levels<\/b>: USDINR: 82.80\/82.65 (Supports), 83.18\/83.35 (resistance),<\/b><\/b><\/p>\r\n

EURINR:92(Resistance),90\/89.55(Support),<\/b><\/p>\r\n

GBPINR: Supports: 104.50\/103.40( supports), Resistance:106.50(Resistance).<\/b><\/p>\r\n

JPYINR: Resistance:57, Supports: 56 (support).<\/b><\/p>\r\n

Hedging advise<\/b>: USDINR imports be hedged on decline to 82.80. EUR nearby payables be covered.<\/b><\/p>\r\n

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FX Weekly Currency Score Week 5 WEEKLY SYNOPSIS: 26\/01\/2024 Currency Map: Currency Pairs WEEK CLOSE PRIOR WEEK CLOSE % change USD\/INR 83.11 83.08 \u00a00.03 EUR\/INR 90.41 90.45 \u00a0 GBP\/INR 105.65 105.56 0.08 JPY\/INR 56.23 55.90 0.59 Brent Crude closed at USD 83.60 VS prior week close of USD 78.75. Gold closed at USD 2018. Nifty […]<\/p>\n","protected":false},"author":6,"featured_media":3180,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"image","meta":{"_acf_changed":false,"footnotes":""},"categories":[36],"tags":[],"class_list":["post-5498","post","type-post","status-publish","format-image","has-post-thumbnail","hentry","category-currency-update","post_format-post-format-image"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts\/5498","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/comments?post=5498"}],"version-history":[{"count":3,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts\/5498\/revisions"}],"predecessor-version":[{"id":9154,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts\/5498\/revisions\/9154"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/media\/3180"}],"wp:attachment":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/media?parent=5498"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/categories?post=5498"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/tags?post=5498"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}