FX Monitor - May 18, 2020 - Geojit

- Indian currency ended at 75.58 on Friday, down 2 paise against its previous close of 75.56.
- FBIL set the reference rate for USDINR at 75.5634 and Euro at 81.6548.
- US dollar to take cues from upcoming FOMC head's testimony in the week.
- US Fed Chair's testimony is scheduled tomorrow while a speech is due on Thursday.
- US retail sales fell by a record 16.64% in Apr while JOLTs job opening (mat) fell to its lowest level since May 2017.
- Euro remained in a range while UK's pound fell on the news of Brexit trade negotiation deadlock.
- Japan's yen is set to focus on GDP preliminary figures for Q1.

USDINR Outlook

Strengthening of American currency and weakness in domestic equity markets continued to haunt the Indian unit for a second day, which closed lower by 2 paise on Friday. Continued capital outflows and volatile oil prices also weighted in the currency. On the last trading day of the week, Local unit opened at 75.51 a dollar and traded in a range of 75.45 and 75.59 before settling the day at 75.58 against its Thursday's closing of 75.56. On week on week basis, Rupee depreciated by 4 paise.

FIIs turned to sellers in the capital market segment on 15 May; sold shares worth Rs 2388.04 as per exchange's provisional figures. DIIs, on the other end were buyers to the tune of Rs 1225.53cr for the same period. Oil prices recovered on rising demand on account of easing travel restrictions around the world. In other news, Fed Chair to his interview on Sunday said "Fed is not out of Ammunition". During the week, Fed Chairman testimony and economic events to be in focus apart from coronavirus tensions.

For USDINR, 75.77 and 76.17 may act as a crucial level in the upside while 75.34 and 75.09 will act as major support levels.

Source : Equity Bulls

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