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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
INR
USD/INR is tracking lower in the first part of trade, the pair off 0.40%, last in the 82.40/45 region. This is fresh lows from mid May. Note the 50-day and 100 day MAs sit in the 82.20/25 region, while below that is the 200-day MA back at 81.795. On the topside, recent highs sit close to 83.00.
- Rupee sentiment looks to be aided by carry over from yesterday's Q1 GDP beat (6.1%y/y versus 5.0% expected). Later on, we get the manufacturing PMI for May. The prior print was 57.2.
- Onshore equities are higher, the Nifty +0.25%, although profit taking emerged late last month near the 18700 level. Still, net equity flows remain firm, totaling $4544mn for May. Weakness elsewhere, particularly in in terms of China may be spurring inflows.
- The RBI will likely soak up dollars on any concerted move down in USD/INR, but rupee outperformance on crosses may still be a theme. Below the chart shows USD/INR versus USD/CNH, with the rupee displaying much lower beta to the recent break higher in USD/CNH. the CNH/INR cross is sub 11.60, fresh multi-month lows.
- Relative growth momentum appears more skewed in India's favor, at least in the near term.
Fig 1: USD/INR & USD/CNH Spot Levels
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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