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The USD/JPY pair extends the rally to around 156.85 during the early Asian session on Thursday. The Japanese Yen (JPY) weakens to a two-week low against the US Dollar (USD) amid concern over Japan’s fiscal health under Prime Minister Sanae Takaichi’s expansionary spending policy. Traders will closely monitor Japan’s snap elections scheduled for Sunday.Takaichi’s ruling Liberal Democratic Party (LDP) is expected to gain more seats in the national election as she seeks voter backing for increased spending, tax cuts, and a new security strategy. Her expansionary fiscal policies raise concerns about Japan’s fiscal outlook, due to fears of debt-funded spending, which drags…
Despite the weakened Danish Krone (DKK) against the Euro (EUR), the Danish central bank has not intervened in the foreign exchange market, indicating that the current interest rate spread will likely remain unchanged. The Krone has shown slight appreciation recently, but the longest period without intervention since the Euro’s introduction continues. Nordea analysts suggest that a seasonal weakening could occur as dividend payments increase in the coming months.No intervention from the Danish central bank”Despite a weakened Danish krone against the euro, the Danish central bank has not yet intervened in the foreign exchange market. This supports our expectation that the…
A dollar/rupee buy/sell swap involves RBI buying dollars and giving banks rupee liquidity in the first leg (February 6) of the transaction | Photo Credit: iStockphoto The Reserve Bank of India’s (RBI) bid to absorb dollars and provide durable rupee liquidity to the banking system via a three-year US dollar/rupee buy/sell swap auction on Wednesday saw robust demand, with market participants seeking to deploy $25.03 billion against the notified amount of $10 billion.The Central bank absorbed the notified amount of $10 billion thereby, providing the banking system rupee liquidity amounting to about ₹90,000 crore. The auction was part of RBI’s…
EUR/GBP eases toward 0.8610 on Wednesday, with the cross pressured by the Euro’s (EUR) relative weakness against a Pound Sterling (GBP) supported by monetary policy expectations in the United Kingdom (UK). The latest macroeconomic indicators from the Eurozone send mixed signals and reinforce the view of a fragile economic recovery, limiting the upside potential of the single currency.In the Eurozone, the HCOB Services Purchasing Managers Index (PMI) came in at 51.6 in January, a four-month low, below market expectations and sharply down from December. In Germany, the downward revision of the HCOB Services PMI to 52.4 confirms that activity in…
At the interbank foreign exchange, the rupee opened at 90.35 and touched an early high of 90.26 and a low of 90.54 against dollar. | Photo Credit: FRANCIS MASCARENHAS The rupee depreciated 11 paise to 90.43 (provisional) against the US dollar on Wednesday, after a sharp rally in the previous trading session following India-US trade deal announcement, on suspected dollar buying by corporates and importers.Forex traders said despite the positive sentiment after the India-US trade deal, caution still remains as there is no signed or officially released trade agreement yet — no framework text or final documentation.At the interbank foreign…
The Indian rupee ended modestly weaker on Wednesday, as companies hedged their dollar exposures and as traders assessed the stronger outlook for the Asian currency a day after a trade deal with the U.S. led to its sharpest rally in over 7 years.The rupee settled at 90.4350 per dollar, down 0.2% from its close at 90.2650 in the previous session.Dollar demand related to maturing positions in the non-deliverable forwards market, corporate hedging and modest portfolio inflows were among the factors that influenced the rupee on Wednesday, traders said.Before building positions in either direction, market participants are trying to calibrate for…
The rupee’s biggest rally in seven years will give the central bank scope to rebuild its foreign-exchange reserves, potentially limiting further gains after the boost from the India-US trade deal, according to some analysts.Barclays Bank Plc and Nomura Holdings Inc. are among those predicting that the Reserve Bank of India will use the recovery in the rupee to buy dollars. They recommend shorting the rupee — Nomura sees it at 94 to a dollar by May, while Barclays is targeting that level via a three-month offshore position.The rupee was down 0.1% to 90.40 against the dollar on Wednesday, following a…
Gold (XAU/USD) builds on a solid recovery from the $4,400 mark, or a four-week low touched on Monday, and gains strong follow-through positive traction for the second straight day on Wednesday. Concerns over rising tensions between the US and Iran resurfaced following overnight reports that the US shot down an Iranian drone in the Arabian Sea. This forces investors to take refuge in traditional safe-haven assets, including the precious metal.The strong move up is further aided by prospects for lower US interest rates, which keep a lid on the recent US Dollar (USD) recovery from a four-year low and lift…
Bank of America expects the Indian rupee to strengthen further by the end of March, after a trade agreement with the U.S. led to its sharpest gain in over seven years on Tuesday, the bank’s top treasury official in India told Reuters.”We are expecting the rupee to strengthen to around 88.60-89.00 against the U.S. dollar, 2% below the bank’s previous forecast for the pair,” said Vikas Jain, head of India fixed income, currencies and commodities trading at the bank in an interview on Tuesday.The foreign lender had earlier forecast the currency at 90.50-91.00 levels.U.S. President Donald Trump announced late on…
The rupee depreciated 22 paise to 90.54 against the US dollar in early trade on Wednesday, following a sharp rally after India and the US agreed to a trade deal on suspected dollar buying by corporates and importers. Forex traders said despite the positive sentiment post the India-US trade deal, caution still remains as there is no signed or officially released trade agreement yet — no framework text or final documentation. At the interbank foreign exchange market, the rupee opened at 90.35 against the US dollar, then lost ground and fell to 90.54, registering a loss of 22 paise over…