FX Analysis: November 27, 2017
Finrex Research | Nov 27, 2017 04:38AM ET
PRIME
Date: 27th November 2017
USD/INR Outlook
The Indian Rupee today opened on a flatter note compared the US dollar at 64.71, the domestic currency remains under pressure at the opening as the importers and foreign banks remain at the dollar buying side amid the Fed rate hike expectations by the end of this year largely dominating trading sentiments.
The Indian Rupee is also seen losing grounds as the S&P rating maintained status quo on the Indian economy’s growth outlook. They still portray grey areas in Governments fiscal deficit management amid the populist reforms.
This week includes a slew of economic releases and events, the investors focus will restrict to Mr. Powell’s testimony and the OPEC meeting. Janet Yellen’s testimony is also scheduled this week; however, the importance will pertain to Mr. Powell’s testimony, future Fed Chair; as his opinion on rate hike will be the guiding post. The US economy is fairing well on the recovery and requires a gradual change, if the future Fed chair quotes an aggressive stance on next year rate hike plan, it would give the US Dollar the required push towards 94.00 levels.
On the other hand, the OPEC meeting is scheduled in the fag end of the week will get the importance, it is widely expected that they going to extend their production cut only till March’18, as the global economy demand picks up. Their optimistic outlook on the revival of the global economy will keep the oil prices on the bid side thereby adding pressure on the EM currencies.
The data events scheduled for the week:
28th November: Jerome Powell testifies before Congress; UK estimate GDP q/q
29th November: Congressional testimony on the economy from Fed Chair Janet Yellen; US prelim GDP q/q
30th November: India GDP numbers; OPEC Meeting
Technically,
USD/INR pair now likely to trade in the tepid range of 64.65-65.35 levels for the week. Weekly closing above 65.00 levels will keep the view of 65.15-25 levels intact for the next week.
Weekly Range 64.60-65.10
Support 64.60 levels
Resistance 65.35, 65.50 levels
EUR/INR Outlook
The EUR/USD pair is currently trading at 1.1923 levels little changed from last week where it hit a two month high of $1.1946, on account of the strong economic data paired with the US dollar weakness. The strength of the region’s largest economy is expected to be highlighted in the upcoming inflation and German labor market reports. At the same time, the uncertainty of German politics continues to remain a threat to the growing currency however it will be months before an election is held.
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GBP/INR Outlook
The GBP/USD pair was seen trading at 1.3318 levels, unchanged from last week’s closing. In the last week Prime Minister May was expected to increase her Brexit Bill offer which was supposed to be positive for the sterling but nothing was announced. Instead, the Ireland border issue was uncovered which is a significant hurdle in the advancement of the Brexit talks. Further weakness in the US Dollar or any sterling-supportive Brexit news could offset the impact of the lower GDP forecasts from 2017 to 2020 by the Office of Budget Responsibility.
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