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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.
INR
INR has been a strong outperformer so far today. Spot is up 0.5% to be back at 78.60, fresh lows for USD/INR back to late June. The pair is also back below the 50 day MA, which comes in at 78.70. Back in April and May, USD/INR tried to break back below the 50 day MA, but each break proved to be false. Of course, global commodity prices were on a much firmer trajectory back during this period.
- INR outperformance is all the more impressive given USD/CNH is pressing higher, see the chart below. The Indian authorities have been mindful of losing competitiveness in the past, given the bilateral trade deficit the country runs with China.
- Lower energy prices are likely to be helping, as is lower US rate expectations/real yields. Such trends should help INR more at the margin relative to the current account surplus economies in the region.
- Yesterday's firmer manufacturing PMI is also a differentiator, particularly given weakness in the North East Asia bloc.
- The Indian manufacturing PMI rose to 56.4 from 53.9 in June, while the dipped into contractionary territory for the NEA bloc. Further PMI prints are due out tomorrow (the services reading and composite for July).
Fig 1: USD/INR & USD/CNH Trends
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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