Weekly Currency Market Report

Market Outlook

On Friday, the rupee opened on weak note at 71.4200 and throughout the week traded in the range of 70.9325 and 71.5600 against US dollar. Cautious opening in domestic equities, rising crude oil prices, strengthening of the greenback vis-a-vis other currencies overseas weighed on the local unit while foreign fund inflows added support to the domestic unit.

On the global front, US President Donald Trump has said that China is doing very poorly as a result of the trade war.Fundamental News

  • Sentiment towards most Asian currencies worsened in the past two weeks as a bitter tariff war between the world’s two biggest economies.
  • Japan surpassed China in June as the top holder of U.S. Treasuries as the trade war between the world’s two largest economies intensified.

Global Updates

  • US Inflation Data Shows Tariffs Are Not a Tax on Consumers but on Foreign & US Corporations.
  • German yield curve inverts as 10-year yield drops below 3-month yield.
  • USD/INR plummets from fresh 6-month high despite a shift in market sentiment.
  • China’s CPI rises to 2.8% y/y in July, beats estimates.
  • Indonesia’s retail sales drop 1.8% y/y in June – BI Survey (USD/IDR extends correction).
  • China sees first factory deflation since 2016.

USDINR after breakout from its resistance level showed bullish movements but unable to sustain on higher levels and showed correction on last trading session of week closed with some gain. Sustaining above 71.0000 mark it may continue positive movements towards 72.0000 and on lower levels it has strong support of 70.5000.

EURINR found resistance on higher levels showed bearish movements and closed with negative bias.  Now, 79.3000 is seen as resistance zone for the currency pair sustaining below this mark it may continue negative movements towards 77.7000 below which it may shows more bearish movements.

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