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Gold price loses some 0.70% on Friday. It seems poised to end the week with losses of more than 2% as the Greenback remains the choice for safety amid the Middle East conflict, which has increased investors’ angst over a reacceleration of inflation. Also, a softer-than-expected reading of US growth data increased the chances of a rate cut in 226.Bullion slips below $5,050 as rising yields, Middle East tensions boost demand for the US DollarThe XAU/USD trades at $5032 after reaching a daily high of $5,128. The US Dollar Index (DXY), which tracks the performance of the American currency against…
OCBC strategists Sim Moh Siong and Christopher Wong highlight that USD/KRW has pushed toward 1,495, reflecting KRW’s high-beta nature during geopolitical stress and energy price spikes. With bullish momentum intact and RSI rising, risks are skewed to the upside, with resistance at 1,500 and 1,510 and support at 1,470, though policymakers’ reassurances and any conflict resolution could slow depreciation and eventually trigger a turnaround.Upside skew while policymakers vigilant”The KRW was among the worst performers, with USDKRW pushing toward 1495 at one point overnight, underscoring the KRW’s high-beta characteristics during periods of geopolitical stress and energy price spikes.””Bullish momentum on daily…
The US Dollar (USD) is ending the week on a firmer stance as the US/Israeli war against Iran closes in on two weeks. Iran’s closure of the Strait of Hormuz has spiked Oil prices, boosting inflation risks and prompting investors to hide in safe-haven currencies like the Greenback. The escalating conflict in the Middle East continues to dominate market sentiment after Iran targeted oil tankers near the Strait of Hormuz this week, disrupting supply in one of the world’s most critical energy corridors.The US Dollar Index (DXY) crossed the 100.00 mark and is now trading near 100.30 after four days…
Commerzbank’s Senior Economist Dr. Henry Hao expects upcoming China data to confirm a structural divergence: Industrial Production around 5.5% year-on-year, supported by a 21.8% export surge in green tech, versus modest 3.0% retail sales and subdued Fixed-Asset Investment near 1.5%. He sees infrastructure-led support only materialising from Q2 as record bond issuance is deployed.Exports drive growth as demand lags”The upcoming release is likely to confirm that China’s industrial sector remains the primary driver of the economy. We forecast Industrial Production (IP) to grow by 5.5% yoy.””The disconnect between supply and demand is expected to persist, with retail sales forecast at…
The rupee fell to a fresh closing low Friday amid concerns over rising crude oil price that stayed above $100 a barrel, its impact on inflation and capital flows.The local currency ended at 92.46 against the dollar, after hitting the intra-day low of 92.49, mirroring the trend across Asian currency markets. The previous all-time low was 92.36, recorded on Thursday. For the week, the rupee closed 0.7% lower.The rupee weakened for the second consecutive week, as geopolitical worries weighed on the currency.”The rupee will remain under pressure till we see any real sign of de-escalation in the Middle East crisis,”…
The Reserve Bank of India on Friday injected Rs 50,000 crore into the banking system by purchasing government securities through an open market operation (OMO).The liquidity infusion comes ahead of advance tax and goods and services tax (GST) payments scheduled later this month before the fiscal year-end.System liquidity was estimated to be in surplus of about Rs 2.49 lakh crore on Thursday.India’s benchmark 10-year bond yield remained flat at 6.68% on Friday, supported by the liquidity injection. Last week, the central bank purchased government securities worth Rs 57,210 crore in the secondary market to contain bond yields amid the West…
Nordea’s Torbjörn Isaksson reports that Swedish CPIF and CPIF ex energy were confirmed at low year-on-year levels, with seasonally adjusted core measures well below the 2% target. Despite a bounce in core services inflation, overall pressures remain subdued. Nordea expects core inflation to fall further and the Riksbank to keep its policy rate unchanged at 1.75% next week.Soft CPIF data support steady Riksbank policy”All in all, February inflation came out well in line with our forecast.””Inflationary pressures are low and we expect core inflation to drop further in the coming months.””The war in the Middle East and the rising energy…
India’s foreign exchange reserves fell to $716.81 billion in the week through March 6 from $728.49 billionin the previous week, Reserve Bank of India data showed on Friday.The $11.68 billion decline in reserves last week came amid heavy dollar sales by the central bank to support the rupee against pressure stemming from the Iran war and the surge in oil prices. The rise in US yields and the dollar strength further contributed to the drop in reserves, analysts said.Gaura Sen Gupta, economist at IDFC FIRST Bank, estimates the decline in reserves reflected net dollar sales of about $6.1 billion by…
The Reserve Bank of India stepped up its government bond purchases from the secondary market to a record level in the week ended March 6, data showed on Friday, as the central bank tried to stabilize the market roiled by the Middle East war.The Reserve Bank of India net bought bonds worth 572.10 billion rupees ($6.20 billion) over the four trading sessions in the week, making it the third consecutive week of purchases. The settlement of the transactions takes place one day after the trade.* Infusing liquidity is the main purpose of bond purchases, but they also impact yields* RBI…
Commerzbank notes that the Strait of Hormuz closure has also halted Qatari LNG shipments, normally one-fifth of global supply, driving TTF natural gas to almost EUR 70/MWh. While EU direct exposure to Qatar is limited, Asian buyers are expected to switch to US LNG and Russia may redirect remaining flows, keeping TTF high until Qatari exports resume.Qatar LNG halt tightens global gas”Shipments of liquefied natural gas (LNG) from Qatar were also interrupted by the closure of the Strait of Hormuz. These shipments normally account for around one-fifth of the global LNG supply.””As a result, the TTF natural gas price rose…