Today's Currency News : 13.11.2019
EURINR is expected to trade depreciate
EURUSD depreciated by 0.23 percent yesterday while EURINR depreciated by 0.05 percent the same time frame. German factory orders for Oct’19 came in at 1.3 percent against market expectations of 0.1 percent. Germany released the November ZEW survey on Economic Sentiment, which came in at - 2.1, much better than the previous -22.8 and the expected -13. The European Commission decided to downgrade its growth forecasts for this year and indicating that “the external environment has become much less supportive and uncertainty is running high.”
OUTLOOK
EURINR is expected to depreciate in today’s session.
Rupee hits two-month low on weak economic data
The Indian rupee on Wednesday opened at a two-month low against the US dollar due to weak domestic macro economic data and tracking Asian currencies which fell on fresh doubts over the US-China trade deal. At 9.10 am, the domestic currency was trading at 71.72 a dollar, down 0.37% from Monday's close of 71.47. The Indian unit opened at 71.78 a dollar and touched a low of 71.79, a level last seen on 17 September. India’s factory output contracted for the second straight month at 4.3% in September, recording its worst show since the present series was launched in April 2012. Following the weak industrial production numbers, analysts see economic growth slowing to less than 5% in the September quarter. The gross domestic product data for September quarter is due on 29 November.
"We recently lowered our growth forecast to 4.9% y-o-y (from 6% earlier) in FY20 and to 6.1% (from 6.9%) in FY21. We attributed this to the economy presently reeling from a combination of a domestic credit stress due to the ‘triple’ balance sheet problem of corporates, banks and shadow banks, clogged policy transmission and weak global growth. This will likely result in a deeper trough and a prolonged phase of bottoming out of the growth cycle," said Nomura Research in a note to its investors."While headline inflation is likely to rise above 4% in near months, we expect the Reserve Bank of India (RBI) to look through the buildup in food price inflation, and deliver a 25bp of rate cut at its next policy meeting in December, followed by another 25bp rate cut in Q2 2020," it added.
Government will release the consumer price index-based inflation and wholesale price index-based inflation data for October on Wednesday and Thursday respectively. According to Bloomberg survey, CPI is likely to rise to 4.34% from 3.99% a month ago while WPI is expected to be at -0.22% from 0.33% a month ago.Government bond yields fell on expectation that the Reserve Bank of India may cut rates further after the slump in factory production. The yield on the 10-year government bond was at 6.546% compared with its previous close of 6.567%. "The persistent slowdown in industrial growth may force RBI to go for another round of policy rate cut in months. However a possible rise of headline inflation above the medium term target of RBI (4%) may act as a point of caution before RBI does a rate cut," said Rahul Gupta, head of currency, Emkay Global Financial Services.
In the year so far, the rupee has weakened 2.6%, while foreign investors have bought nearly $11.60 billion in Indian equities and $5.32 billion in debt.
The benchmark equity index Sensex was a tad up at 40370.52 points. Year to date, it has gained 11.86%.
Asian currencies were trading lower after US President Donald Trump said the US will increase tariffs on China if the first step of a broader agreement is not reached.South Korean won was down 0.58%, Malaysian ringgit 0.24%, China renminbi 0.20%, Indonesian rupiah 0.24%, Philippines peso 0.17%, Taiwan dollar 0.12%, Singapore dollar 0.05%. However, Thai Baht was up 0.08%.
The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.333, up marginally from its previous close of 98.309.
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EURINR is expected to trade depreciate
EURUSD depreciated by 0.23 percent yesterday while EURINR depreciated by 0.05 percent the same time frame. German factory orders for Oct’19 came in at 1.3 percent against market expectations of 0.1 percent. Germany released the November ZEW survey on Economic Sentiment, which came in at - 2.1, much better than the previous -22.8 and the expected -13. The European Commission decided to downgrade its growth forecasts for this year and indicating that “the external environment has become much less supportive and uncertainty is running high.”
OUTLOOK
EURINR is expected to depreciate in today’s session.
Rupee hits two-month low on weak economic data
The Indian rupee on Wednesday opened at a two-month low against the US dollar due to weak domestic macro economic data and tracking Asian currencies which fell on fresh doubts over the US-China trade deal. At 9.10 am, the domestic currency was trading at 71.72 a dollar, down 0.37% from Monday's close of 71.47. The Indian unit opened at 71.78 a dollar and touched a low of 71.79, a level last seen on 17 September. India’s factory output contracted for the second straight month at 4.3% in September, recording its worst show since the present series was launched in April 2012. Following the weak industrial production numbers, analysts see economic growth slowing to less than 5% in the September quarter. The gross domestic product data for September quarter is due on 29 November.
"We recently lowered our growth forecast to 4.9% y-o-y (from 6% earlier) in FY20 and to 6.1% (from 6.9%) in FY21. We attributed this to the economy presently reeling from a combination of a domestic credit stress due to the ‘triple’ balance sheet problem of corporates, banks and shadow banks, clogged policy transmission and weak global growth. This will likely result in a deeper trough and a prolonged phase of bottoming out of the growth cycle," said Nomura Research in a note to its investors."While headline inflation is likely to rise above 4% in near months, we expect the Reserve Bank of India (RBI) to look through the buildup in food price inflation, and deliver a 25bp of rate cut at its next policy meeting in December, followed by another 25bp rate cut in Q2 2020," it added.
Government will release the consumer price index-based inflation and wholesale price index-based inflation data for October on Wednesday and Thursday respectively. According to Bloomberg survey, CPI is likely to rise to 4.34% from 3.99% a month ago while WPI is expected to be at -0.22% from 0.33% a month ago.Government bond yields fell on expectation that the Reserve Bank of India may cut rates further after the slump in factory production. The yield on the 10-year government bond was at 6.546% compared with its previous close of 6.567%. "The persistent slowdown in industrial growth may force RBI to go for another round of policy rate cut in months. However a possible rise of headline inflation above the medium term target of RBI (4%) may act as a point of caution before RBI does a rate cut," said Rahul Gupta, head of currency, Emkay Global Financial Services.
In the year so far, the rupee has weakened 2.6%, while foreign investors have bought nearly $11.60 billion in Indian equities and $5.32 billion in debt.
The benchmark equity index Sensex was a tad up at 40370.52 points. Year to date, it has gained 11.86%.
Asian currencies were trading lower after US President Donald Trump said the US will increase tariffs on China if the first step of a broader agreement is not reached.South Korean won was down 0.58%, Malaysian ringgit 0.24%, China renminbi 0.20%, Indonesian rupiah 0.24%, Philippines peso 0.17%, Taiwan dollar 0.12%, Singapore dollar 0.05%. However, Thai Baht was up 0.08%.
The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.333, up marginally from its previous close of 98.309.