Forex Market Insights

Forex Market Insights

Trade Promotion Council of India has associated with Myforexeye Insights to bring a weekly newsletter on forex market insights for Indian exporters. The newsletter will regularly track the movement of the Indian rupee vis-a-vis other currencies and give you a sense of possible movements and market sentiments in the upcoming week.

The newsletter is aimed at providing businesses with vital inputs on currency market trends that can enable them to make more informed business decisions.

Forex Market Insights May 15-21, 2022
The dollar index sky rocketed to a 20-year peak, sending international major currencies and Asian currencies plunging into multi-year bottoms. US inflation continues to trend higher and the Fed reiterates their stand on taking remedial actions, indicating more hikes. Inflation was higher in China and India as well and this could complicate matters for policy makers in the growth vs inflation debate. With crude prices persisting at elevated levels and the Russia-Ukraine war showing no signs of cooling off, inflationary pressures could dominate 2022. No wonder there is a massive flight to risk aversion...
Forex Market Insights May 8-14, 2022
An eventful week for the financial markets, which kept market participants at the edge of their seats. A scheduled rate hike from Fed and BoE to an unscheduled one from RBI ensured enough volatility in the system. Fed’s tightening policy would continue on track after the non-farm payrolls number expands in April. Emerging market currencies closed in red, but hopes of dollar inflows for LIC IPO took the Rupee a tad below 76...
Forex Market Insights May 2-8, 2022
The Chinese Yuan directed Asian currencies this week after weakening to 6.65 against the US dollar, with oil rising amid Moscow cutting off gas supplies to Poland and Bulgaria. As Yen and Euro hit 20-year and 5-year lows respectively, the dollar is flying high on hopes of a 0.5% rate hike at the May 4 Fed meeting, as the interest rate gap increases between these economies. Recessionary fears loom as US economy contracted first time in 2 years...
Forex Market Insights Newsletter April 24-30
Inflation has prompted IMF to lower the economic growth forecast for the globe by nearly a full percentage point. If Western countries expand their sanctions against Russia, a 2-month long war could prompt a further increase in inflation. US treasury yields have rocketed, causing capital outflows from Asian economies (read China & India) on aggressive rate hike expectations from US and Europe. Markets are eagerly awaiting for the Fed's next rate action in May as well as the RBI's expected response...
Forex Market Insights Newsletter April 18-23
IMF has lowered the global growth forecast due to worsening supply bottlenecks (read Chinese lockdowns) and higher inflation caused by Ukraine crisis as Russian President Vladimir Putin warns of Western countries phasing out Russian gas imports. Single currency slid towards a two year low against the dollar after a dovish ECB policy, increasing the interest rate gap between US/UK and Eurozone. In a short week for the Indian markets, the Rupee closed the week at a low after local inflation rose beyond central bank’s tolerance level.
Forex Market Insights Newsletter April 11-17
US FOMC meeting minutes strongly indicated a 50bps rate hike as early as May while reducing the Fed’s balance sheet by $95bn monthly; leading the US yield curve to steepen after having inverted recently. After a heightened expectation of more than 2% additional Fed funds rate hikes in 2022, the dollar reached for the skies as most global currencies weakened. The rupee took cue from the central bank’s monetary policy meeting where key interest rates were left unchanged...
Forex Market Insights Newsletter, April 4-10, 2022
Interest rate hikes are here with expectations of further increases in months to come. Most US Federal Reserve members have been bullish with favourable economic data. As Ukraine-Russia peace talks seem to make headway, financial markets are taking a breather. Volatile oil prices have kept demand in control, though US President wants to release strategic oil reserves to combat inflation. The much awaited LIC IPO didn’t see the light of the day in March but fingers are crossed as the DRHP deadline - May first week comes closer...
Forex Market Insights Newsletter, March 27-April 1, 2022
Crude oil prices ruled the market trends this week, taking other metal commodities along. Apart from G7 tackling the Ukraine-Russia war situation, few FOMC members reiterated Federal Reserve Governor Jerome Powell’s prognosis of higher interest rates in 2022, especially during the next May meeting. The better than expected initial jobless claims from US ensured that the dollar retained its shine and it sharply rose against its counterpart – Japanese Yen, taken as a safe-haven till now.
Forex Market Insights March 20-26, 2022
Global central banks have clearly indicated that they are concerned about economies going into stagflation, with US and UK hiking their cost of borrowings. The ongoing Russia-Ukraine war has kept the stance dovish for the short term due to high energy prices. Japan has retained the stimulus, though post-April, they seek to raise rates too. Equities around the world ended the week on a positive, though Indian investors are keeping an eye on the LIC IPO dates. Retail inflation in India is still above the RBI’s tolerance ceiling. Is RBI under pressure to also follow the rest as India sees about US$ 5 billion outflow in first 2 weeks of March?  
Forex Market Insights - 13-19 March, 2022
The fact that US inflation is at a 40-year high, is expected to propel a rate hike by the Fed this week. Market speculations expect a rate hike of around 25bps, but the Fed Chair is known to surprise financial markets again and again. The European Central Bank has already started talking hawkishly compared to their last meeting. The Bank of England has raised rates twice and is due to meet the coming week. Meanwhile, even as the rupee continues to face immense volatility, the LIC IPO is much awaited by Rupee bulls, as it could propel a return to Indian equities...

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