Rupee's fall was limited and closed around 45.13 as two state-run banks were said to be selling dollars persistently. The selling led to talk that it could be for Reserve Bank of India. Apart from the selling by nationalized banks, there is no other major supply. However, rupee remained weak because of dollar demand from NDF markets and oil companies.
The dollar was on pause versus other major currencies ,as traders looked ahead to a slew of economic data coming on Friday including key inflation data and a reading on consumer sentiment.
Euro would reach as high as 1.4177 but the typical statements failed to generate any significant Euro bullish momentum which saw the EURUSD fall back below 1.4120.Currency reversed its Gains From Trichet’s Reaffirmation of Price Stability . ECB was focused on preventing second round effects of inflation. The central bank leader also stated that growth in the region would rebound after a dip in growth during the second and third quarters. A rebound in French industrial production of 1.5% in July from –0.6% the month prior supports those statements .Currency is expected to have a downside direction as there are no signs of a reversal. But the pair would slightly incline in attempts to retest the 1.42 levels. The trading range is between the key support at 1.3935 and the key resistance at 1.4280
Pound was finding support throughout the overnight session until its trade report showed the deficit widening to 7.667 billion on falling imports. The U.K. consumer has been battered by high inflation and a declining housing market which has led to speculation that the BoE will need to lower interest rates in the near term to soften the economy’s landing which continues to weigh on pound. Direction for sterling remains downside whereas a successful breakout of resistance levels of 1.7680 will result in vigorous upside movements. Sideways movement is expected as momentum indicators are pointing to the downside while direction indicators are still neutral as seen on the MACD indicator .
Japan's wholesale price inflation rate remained close to a 27-year high in August and the current account surplus narrowed for the fifth straight month .Higher prices of petroleum products were primarily responsible for the higher inflation rate. For JPY upside direction remains intact where correction to the downside was because of the pair is seen in an overbought area for a long time. The pair has entered a strong upside channel as trading remains above 106.60 supported by direction indicators that are trying to follow the medium term trend..With resistance at 108.50 levels
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