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Market participants said the central bank’s dollar sales and swap operations helped stabilise the currency and manage liquidity amid pressure from higher borrowing plans. | Photo Credit: Yields of Government Securities (G-Sec) hardened on Monday as the Union Budget for FY27 proposed a higher Government borrowing programme. However, the rupee recovered lost ground after reports of RBI intervention in the forex market.The Union Budget for FY27, announced on February 1 (Sunday), has pegged the Government’s gross market borrowing higher at ₹17.2 lakh crore, up from ₹14.8 lakh crore in FY26.10-year benchmarkYield of the 10-year benchmark G-Sec (6.48 per cent 2035GS)…
Deutsche Bank Research Analyst Michael Hsueh reiterates its bullish outlook on Gold, maintaining a target price of $6,000 per ounce. The report emphasizes that recent price corrections do not indicate a fundamental shift in investor sentiment. It highlights ongoing positive thematic drivers for Gold and notes significant investment flows from China as a key factor supporting this outlook.Bullish outlook for Gold persists”We argue that the adjustment in precious metal prices overshot the significance of its ostensible catalysts. Moreover, investor intentions in precious (official, institutional, individual) have not likely changed for the worse as of yet.””Gold’s thematic drivers remain positive and…
The Indian rupee logged its best single-day gain in over a month on Monday, boosted by likely dollar sales by the central bank and modest inflows that dulled the spillover from global market volatility.The central bank complemented its interventions with dollar-rupee buy/sell swaps, which, traders said, were intended to offset the liquidity impact of its spot dollar sales.The liquidity impact of FX interventions has remained in focus due to their effect on money market interest rates as worries over hefty government borrowing have kept government bond yields elevated.On Monday, the rupee rose 0.5% to end the session at 91.5125 per…
Deutsche Bank’s report, authored by Jim Reid, highlights a major sell-off in Gold, with a decline of 8.95%, marking its largest daily drop since 2013. The report attributes this volatility to the nomination of Kevin Warsh as Fed Chair, which has raised hawkish expectations. The report also notes that Gold has seen a speculative element in its recent price movements, alongside a broader risk-off mood in the markets.Volatility driven by Fed Chair nomination”Welcome to February with another big sell-off in Gold (-5%) and Silver (-10%) overnight, and a partial US government shutdown that isn’t as severe as the record one…
The rupee gained 37 paise to 91.56 against the US dollar in early trade on Monday, a day after the Union Budget 2026-27 was presented, largely as crude oil prices retreated from their elevated levels. Forex traders said for the rupee, the budget offered reassurance, not relief. Moreover, the government’s high borrowing plan is likely to weigh on investor sentiments. The government is likely to borrow ₹17.2 lakh crore in the next financial year to fund its fiscal deficit projected at 4.3 per cent of the GDP. At the interbank foreign exchange market, the rupee opened at 91.95 against the…
Silver price (XAG/USD) trades cautiously at around $80 during the Asian trading session at the start of the week, slightly above the fresh four-week low of $73.33 posted on Friday. The white metal strives to regain ground after last week’s mayhem, in which it lost over 30% of its value from the lifetime highs of $121.66, triggered due to a strong US Dollar (USD), profit-booking after a stalwart rally, and expectations of a hawkish Federal Reserve’s (Fed) monetary policy outlook.Technically higher US Dollar makes the Silver price an unfavorable risk-reward bet for investors.As of writing, the US Dollar Index (DXY),…
Gold price (XAU/USD) tumbles to around $4,780 during the early Asian session on Monday. The precious metal extends the decline after reaching historic highs last week amid signs of political stability in the United States (US). Traders will take more cues from the US ISM Manufacturing Purchasing Managers Index (PMI) report later on Monday. The yellow metal had been soaring to record highs in the previous weeks, bolstered by worries that US President Donald Trump would choose a Federal Reserve (Fed) Chairman who would cave into his demands to cut interest rates. Nonetheless, reports that Trump would nominate Kevin Warsh, who is…
I’m convinced that Nutella is the second most important invention after the wheel. So yes, I’m an unapologetic hazelnut fan.That said, a few months ago I started to notice something odd. The price of natural hazelnuts had more or less doubled. Shortly after, they became surprisingly hard to find, at least in supermarkets where they had always been readily available.That caught my attention. And it made me wonder whether something unusual had happened, or was still unfolding, in the hazelnut market.Hazelnuts: a commodity shock without a marketHazelnuts are a small commodity with an unusually concentrated supply chain. Around 70% of…
India’s foreign exchange reserves reached a new all-time high in the week ended January 23, according to the Reserve Bank of India’s latest data. Foreign exchange reserves rose sharply by $8.053 billion in the week to $709.413 billion, driven by a jump in both gold reserves and foreign currency assets.Over the past few weeks, the forex kitty has been largely in an uptrend. Its previous high was $704.89 billion, touched in September 2024. For the reported week (that ended January 23), India’s foreign currency assets (FCA), the largest component of foreign exchange reserves, stood at $562.885 billion, up $2.367 billion.The…
The U.S. dollar gained on Friday after former Federal Reserve Governor Kevin Warsh was selected to be the next Fed chair, and as the U.S. currency recovered from a sharp selloff earlier in the week that analysts say was overdone in the short-term. President Donald Trump on Friday chose Warsh to head the U.S. central bank when Jerome Powell’s leadership term ends in May. Warsh is seen as likely to support lower interest rates but would stop well short of the more aggressive easing associated with some of the other potential nominees. Marc Chandler, chief market strategist at Bannockburn Global…