Daily FX Trends - Mecklai Financial

Daily FX Trends - Commentaries

	USD/INR	EURO/USD	GBP/USD	USD/JPY	USD/CHF
Macro Support-Resistance Levels	94.75-96.50	1.1050-1.2100	1.2800-1.3900	151.50.-160.00	0.7800-0.8600
Sentiment against USD	Positive	Negative	Neutral	Positive	Positive
Forecast for the day	95.95-96.45	1.1120-1.1235	1.3135-1.3245	157.70-158.50	0.8280-0.8320

Spot rupee ended at 96.29/30 to a dollar level after opening at 96.21/22 level. The rupee was under pressure amid worries about high crude oil prices and US Dollar’s strength. However, gains were limited as traders await the RBI’s monetary policy decision during this week. Market expects the RBI to begin its tightening policy. Equity market benchmarks were trading volatile, but ended about 0.6 higher.
The Indian rupee remained around ₹96.2 per dollar, supported by softer oil prices, lower expectations of a Fed rate hike and RBI intervention. However, a strong dollar and high US Treasury yields continue to pressure the rupee. With inflation at 4.82 and Q2 growth at 7.8, markets increasingly expect an RBI rate hike.
DXY is trading slightly lower at 102.16 level today, slightly off today’s highs. Euro/USD has recovered modestly from today’s 17-month low. EUR/USD fell to 1.1160 level as market concerns over France’s and Spain’s fiscal woes and political uncertainty ahead of French Presidential elections. Meanwhile, PMI data showed European economic activity was mixed. Germany and Spain showed strong improvement, while Italy and France recorded weaker growth. The UK also expanded, but growth slowed. Across Europe, rising energy and input costs are adding to inflationary pressures.
Overall, strong dollar conditions, elevated inflation and geopolitical risks are likely to keep currency markets volatile in the near term.
Key data releases ahead today: US: Final Composite PMI

Spot rupee opens at 96.22 to a dollar level today against previous close at 96.32 level. Equity market benchmarks are trading about 0.6 higher in early trades.

DXY traded higher at 102.44, with the dollar remaining firm despite a much weaker-than-expected US jobs report. September NFP rose only 29K vs. 90K expected, while the unemployment rate increased to 4.2. Previous months were also revised lower, highlighting a clear loss of hiring momentum. Wage growth slowed to 0.1 m/m, with annual growth at 3.0.

The soft labour-market data, alongside weaker PCE inflation, reduced expectations for a rate hike this month. Markets continue to see a strong possibility of a December hike, however, as inflation and input-cost pressures remain elevated.

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