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The German IFO Institute Business Climate Index has unexpectedly improved to 84.9 in May, while it was expected to arrive lower at 84.2. The sentiment data in April has been revised higher to 84.5 from 84.4.The IFO Current Assessment Index also arrives higher at 86.1 from 85.4 in April. It was expected to drop to 85.1.Expectations Index comes higher at 83.8 vs. expectations and the previous reading of 83.5. April’s figure revised higher from 83.3.Market reactionNo immediate reaction seen in the Euro (EUR) after the data release. As of writing, EUR/USD trades subduedly around 1.1610. German economy FAQs The German…
India’s central bank may need to draw on its 2013 taper tantrum playbook and earlier balance-of-payments crises to mount an effective defence of the beleaguered rupee.The Reserve Bank of India under Governor Sanjay Malhotra is considering a range of measures to stabilize the currency, including raising interest rates, additional currency swaps and steps to raise dollars from overseas investors, Bloomberg News reported Thursday.The urgency has grown after the rupee slumped to a record low of nearly 97 per dollar this week, driving up import costs and further eroding investors’ confidence. The RBI’s immediate priority: arrest further depreciation.“It’s important to avoid…
Silver price (XAG/USD) declines after two days of gains, trading around $76.10 per troy ounce during the Asian hours on Friday. The non-yielding white metal struggles amid rising odds of hawkish sentiment surrounding the Federal Reserve (Fed) policy stance.Elevated energy prices linked to the Strait of Hormuz threaten to feed into core US consumer prices and inflation expectations, which could potentially push the Fed to keep interest rates higher. Furthermore, a stronger US economic growth outlook is adding weight to the case for monetary tightening and putting pressure on non-interest-bearing assets, including Silver.Fed officials remain cautious as they evaluate whether…
The dollar held near a six-week top on Friday, after a volatile overnight session on conflicting signals over a U.S.-Iran peace deal, though investors latched on to hopes of some progress. Washington and Tehran stuck to opposing stances over the latter’s uranium stockpile and control of the Strait of Hormuz, although U.S. Secretary of State Marco Rubio said there had been “some good signs” in talks. The mixed messages whipsawed markets overnight, though moves in currencies were largely subdued in early Asian trade on Friday as investors awaited more clarity.The dollar was a touch higher and stood at 99.24 against…
Senior Iranian officials said that no deal has been reached with the United States (US), but gaps have been narrowed, Reuters reported on Friday. However, Islamic Republic’s Supreme Leader, Mojtaba Khamenei, stated that Iran’s uranium enrichment and Tehran’s control over the Strait of Hormuz remain among the sticking points.Market reactionAt the time of writing, the West Texas Intermediate (WTI) is down 0.41% on the day at $96.83. WTI Oil FAQs WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is…
Mumbai: The Indian rupee, under the cosh for 10 straight days, Thursday rebounded against the dollar in the spot market to log its steepest gains in a fortnight after what dealers described as unusually heavy central bank interventions to support the currency. Talk that policymakers might even raise interest rates buttressed the rupee, which outshone peers in the continent to emerge as the strongest Asian performer against the dollar Thursday. The local unit closed at 96.20 per dollar in the Mumbai spot market against the previous close of 96.82. Traders reported heavy dollar sales by state-run banks, likely on behalf…
Arvind Panagariya has advised the RBI to allow the rupee to depreciate naturally instead of aggressively defending the ₹100-per-dollar level amid rising oil prices and external pressures. | Photo Credit: SANDEEP SAXENA Economist Arvind Panagariya has urged the Reserve Bank of India not to allow the “psychology” surrounding the rupee breaching the 100-per-dollar mark to dictate its policy response, arguing that depreciation is the appropriate response to a spike in oil-related external pressures.“Whether the oil shortage is short-lived or long-lived, the right response at this moment is to let the rupee depreciate,” said the chairman of the 16th Finance Commission,…
Standard Chartered Bank economists Anubhuti Sahay and Saurav Anand now expect the Reserve Bank of India’s repo rate to rise by 50bps to 5.75% in FY27, starting in June. They link this to a higher FY27 CPI forecast of 4.9%, INR depreciation and global yield pressures, and flag additional upside risks to rate hikes if commodity prices and INR weakness persist.Standard Chartered revises FY27 rate path”We revise our repo rate forecast to a cumulative 50bps of hikes to 5.75% in FY27 (year ending March 2027), from our earlier status quo call of 5.25%. This reflects an upward revision to our…
OCBC’s FX Strategist Christopher Wong notes the Dollar Index eased as lower UST yields and softer Oil prices reduced safe-haven demand, with the Federal Open Market Committee (FOMC) minutes adding no new hawkish impulse. He highlights ongoing bullish daily momentum but signs of an overbought reversal. US Dollar Index (DXY) is consolidating, with resistance around 99.40 and 100.50/60 and support clustered between 98.30 and 97.50.Dollar rebound loses some momentum”USD eased overnight, taking cues from softer yields while oil prices slipped. The FOMC minutes offered no major surprises. The Fed still sounded patient, with officials focused on inflation risks and not…
The Indian rupee rose on Thursday, its first day of gains in two weeks, after the central bank shored up the currency through firm intervention, while a media report that policy options including a potential rate hike are being weighed for its defence also helped. The rupee closed at 96.20, up 0.6% from its close at 96.82 in the previous session, its best one-day gain in two weeks. The Reserve Bank of India deployed a familiar intervention strategy on Thursday, conducting heavy dollar sales via state-run banks before market open to halt a persistent slide in the rupee after a…