Despite a number of events unfolding both domestically and globally over the past few weeks, the rupee has been trading in a limited range with little volatility. Due to a lack of domestic cues, active RBI intervention is keeping volatility in control, and it is anticipated that this will continue throughout the next several weeks as well. The rising cost of crude oil globally has also had a minimal effect on the value of the currency. Crude has increased by more than 8% as most market players are on edge due to geopolitics remaining in the spotlight and uncertainty surrounding Israel.
Throughout the week, the US 10-year yield hit a 16-year high of 5% and the dollar gained strength versus its key currencies. Following the Fed Chairman’s economic remarks, in which he reiterated his concerns about inflation, US treasuries rose. A hawkish stance on interest rates kept the dollar sustained at lower levels, which put pressure on other significant crosses, such as the rupee.
No significant economic data is anticipated to be revealed this week domestically, but the attention will still be on global issues. Geopolitics will be a major topic of discussion, and any escalation might lead to rupee weakening and dollar safe haven purchasing.
Watching the US economic data and the ECB’s policy announcement will be crucial on the international scene. Although it is anticipated that the central bank will retain rates, it will be crucial to pay attention to the governor’s remarks. The USDINR(Spot) is predicted to quote between 82.80 and 83.50 and move sideways.
Despite growing global concern, the dollar has been consolidating over the past few weeks within a broad range. Losses have been limited as safe haven purchasing in the US dollar was observed after the Israeli military issued a warning to Gazan inhabitants. The US has surpassed forecasts in the economic calendar, which keeps the dollar sustained at lower levels.
The remarks made by the Fed Chairman last week were the cause of the volatility. He said that the robust U.S. economy and competitive labor markets could necessitate stringent borrowing requirements in order to restrain price increases. The chairman of the Federal Reserve also mentioned that the bank was taking its time determining if more rate hikes were necessary.
The preliminary PMI numbers for manufacturing and services from the main economies are anticipated to be revealed this week. Aside from this, we will be closely observing the US’s advance GDP, durable goods, and core PCE index. The preliminary PMI numbers for manufacturing and services from the main economies are anticipated to be revealed this week. In general, we anticipate that the dollar will trade well relative to its key crosses.
