FX Monitor - April 16, 2020 - Geojit

- Indian currency ended at 76.44 yesterday, down 17 paise against its previous close of 76.27.
- FBIL set the reference rate for USDINR at 76.3617 and Euro at 83.5657.
- In economic news, domestic WPI for March fell 1% against 2.26% MoM while trade deficit narrowed in Mar.
- US dollar edged higher against a basket of currencies after weak economic data spur concerns of a slowing economy.
- US IIP for Mar fell the most in 74 years while retail sales fell 8.7% MoM. Today, initial and continuing jobless claims are due to be released.
- Fed's Beige book reported contraction and uncertain outlooks across all districts in US.
- Euro slumped while UK's pound fell on cautious stance.
- PBOC yesterday reduced its one-year MLF to 2.95%; its lowest since introduction.
- On the data front, China is due to release its first quarter GDP numbers on Friday.
- PBOC has set the Yuan reference rate at 7.0714 versus Wednesday's fix at 7.0402.

Outlook - USDINR

Indian currency again came under pressure tracking the weak equity markets led by the lockdown extension and appreciating USD overseas. After a higher opening at 76.07 a dollar, the local unit drifted in between a high and low of 75.99 and 76.48 before settling the day at 76.44 against its Monday's closing of 76.27. On Tuesday, Indian markets were shut on account of Ambedkar Jayanti.

FIIs were buyers in the capital markets segment; bought shares worth Rs 1358.66cr on 15 Apr as per exchange's provisional figures. DIIs, on the other end were sellers to the tune of Rs 1097.86cr for the same period. On the data side, wholesale price inflation released yesterday eased to a four-month low on falling fuel power and food prices. The trade balance figures also shrank to $9.76 billion in Mar from $11 billion YoY. Oil prices pared its gains after IEA warned of demand falling to the lowest in 25 years and grim IMF report. In other news, IMF stated that the Asia's economic growth to halt for the first time in 60 years on coronavirus toll.

For USDINR, a rise above 76.58 may take the currency to more higher levels while 75.91 and 75.60 will act as major support levels.

Source : Equity Bulls

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