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Gold (XAU/USD) retreats sharply from the $5,250 level, or a fresh monthly peak touched during the Asian session, and for now, seems to have snapped a four-day winning streak. Following the previous day’s knee-jerk fall in reaction to US President Donald Trump’s new global tariffs and the subsequent bounce, the US Dollar (USD) attracts fresh buyers in the wake of the US Federal Reserve’s (Fed) hawkish outlook. This, in turn, is seen as a key factor exerting downward pressure on the commodity.In fact, minutes from the January FOMC meeting showed last week that several Fed officials judged that additional policy…
RBI is likely to start buying dollars to bolster its foreign-exchange reserves once the rupee strengthens to around 88—89 per dollar, according to Citigroup Inc.’s local markets head.“In the short-term, we see the rupee in a band of 90 to 91.25 per dollar,” Aditya Bagree, head of markets for India and the subcontinent, said in an interview in Mumbai. The currency closed 0.1% higher at 90.88 on Monday. Although the RBI’s reserves are at a record high, boosted by a historic rally in gold, it is carrying a $62 billion short forward book. As those contracts mature, the central bank will…
GBP/USD spent Monday spinning in place as market participants await a fresh catalyst to break the pair out of its recent range. The BoE’s February hold came with a surprisingly dovish 5-4 split, and UK Consumer Price Index (CPI) data last week showed inflation easing to 3.0%, reinforcing the case for earlier rate cuts, with most economists now looking to April or March for the next move. On the US side, the Fed is holding rates at 3.50% to 3.75%, and the January CPI print at 2.4% supports a patient approach, though the Supreme Court’s decision to strike down IEEPA…
ING’s Frantisek Taborsky highlights a light CEE data calendar but focuses on Hungary, where the National Bank of Hungary is expected to restart its cutting cycle with a 25bp move to 6.25%. He sees further cuts in March and notes that risk-off sentiment from US trade headlines may be partly offset by a weaker Dollar, with EUR/HUF testing carry resilience after recent lows near 378.NBH cuts and carry positioning in focus”Tomorrow, the National Bank of Hungary, according to our expectations, will open the cutting cycle again and cut rates by 25bp to 6.25%, the first time since September 2024.””Particular attention…
Commerzbank’s Economic Research team, led by Dr. Vincent Stamer, outlines how US trade policy is shifting after the Supreme Court ruling on earlier Trump tariffs. The new 15% global tariff is based on Section 122 of the Trade Act of 1974, interacts with MFN duties and sectoral tariffs.Section 122, MFN base and sectoral carve-outs”Donald Trump is invoking Section 122 of the Trade Act of 1974. This allows the president to impose additional tariffs of up to 15% for a period of up to 150 days in the event of an existing trade deficit. The additional duty may therefore not exceed…
The rupee gained 7 paise to settle at 90.87 (provisional) against the US dollar on Monday, aided by a sharp fall in global crude oil prices and a weaker greenback amid renewed global trade-related uncertainties. However, foreign fund outflows, coupled with geopolitical concerns, capped gains for the local unit, forex traders said. At the interbank foreign exchange, the rupee opened at 90.76 and traded in the range of 90.67-90.89 against the greenback during the session. It eventually settled at 90.87 (provisional), up 7 paise from its previous close. The rupee plunged 26 paise to settle at 90.94 against the US…
BNY’s Head of Markets Macro Strategy Bob Savage expects rate cuts from Bank of Israel and Hungarian National Bank as inflation softens and exchange rates remain elevated. The report notes that both ILS and HUF have been strong sources of tightening, with markets focused on whether easing cycles will be precautionary or more prolonged, given ample room to cut from high starting policy rates.Israel and Hungary set for easing cycles”In EMEA, Bank of Israel (BoI) and Hungarian National Bank (MNB) decisions this week are likely to yield cuts as central banks react to materially softer inflation and elevated exchange rate…
Highlights RBI’s forward book maturities may pressure rupee, bankers say NDF contracts worth at least $7 billion set to mature this week Durable inflows could reduce RBI’s forward positions, alleviate rollover pressure, bankers add Reserve Bank of India’s (RBI) reliance on using the non-deliverable forward market to manage rupee volatility is expected to weigh on the currency, with contracts worth at least $7 billion due to mature this week and more due in the coming weeks, four bankers said.Selling dollar/rupee forwards in the NDF market lets the Reserve Bank of India support the rupee without an immediate drain on foreign…
The rupee surged by 21 paise to 90.73 against the US dollar in early trade on Monday, aided by a sharp fall in global crude oil prices and a weaker greenback amid renewed uncertainties over US President Donald Trump hiking tariffs to 15 per cent. Brent crude, the global oil benchmark, was down 1.09 per cent at USD 70.98 per barrel. A strong opening in domestic equity markets, along with a jump in forex reserves, provided further support to the local unit, according to forex traders.At the interbank foreign exchange, the rupee opened at 90.76 against the US dollar and…
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, extends its losses for the second successive session, trading around 97.50 during the Asian hours on Monday.The dollar index weakened against major currencies as persistent uncertainty around the United States (US) trade policy and disappointing economic data weighed on investor sentiment. Recent legal and policy developments have compounded confusion over the outlook for tariffs and growth.Global markets remain on edge after the US Supreme Court struck down most of President Donald Trump’s emergency tariff authority, limiting the use of emergency powers to…