Market Overview
- The Indian Rupee strengthens against the US Dollar, with the exchange rate hovering around 85.75. This is due to India's lack of urgency in signing a trade deal with the US and hopes of declining oil prices due to increased production by OPEC+.
- The US Dollar stabilizes amid uncertainties over tariff policies. President Trump plans to impose tariffs on countries like Mexico, China, and Canada to support the US economy.
- Gold prices in India remain stable, with factors such as rising trade tensions and a modest USD downtick contributing to the safe-haven appeal of gold.
Fundamental Analysis
- FOMC minutes reveal concerns about tariff-related inflation. The delay in the trade deal impacts Indian equity markets, with Nifty50 and Sensex30 declining.
- The EUR/USD pair rose as the US Dollar weakened due to concerns over tariffs imposed by Trump on eight countries. The Euro gained ground after news that the EU would not face additional tariffs.
- The GBP/USD pair strengthens near 1.3605 in anticipation of more rate cuts by the Federal Reserve.
Technical Analysis
- Technical analysis shows USD/INR below the 20-day EMA, facing selling pressure.
- The USD/CHF pair sees a slight rebound on Thursday, supported by a positive risk tone and a modest USD uptick. However, trade jitters and Fed rate cut bets may limit aggressive bets.
- Gold price technical analysis showed a recovery from the 38.2% Fibonacci Retracement level, with potential resistance at the 50-day SMA.
Conclusion
- Market outlook remains uncertain due to tariff policies and potential central bank rate cuts.
- Potential trading opportunities could arise from these uncertainties, particularly in currency pairs like EUR/USD and GBP/USD.
- Gold continues to hold its appeal as a safe-haven asset amidst market turbulence.
FX Option Expiries
- EUR/USD: 1.1500: 2.1 billion EUR, 1.1650: 3.7 billion EUR, 1.1700: 1.6 billion EUR, 1.1800: 2 billion EUR, 1.1900: 959 million EUR.
- GBP/USD: 1.3570: 617 million GBP.
- USD/JPY: 144.00: 732 million USD, 146.00: 1 billion USD, 146.50: 940 million USD, 147.00: 1.1 billion USD, 147.25: 719 million USD.
- AUD/USD: 0.6500: 747 million AUD, 0.6600: 704 million AUD, 0.6650: 1.1 billion AUD.
- USD/CAD: -1.3575:480 million USD, -1.3630:454 million USD, -1.3635:749 million USD.
- NZD/USD:-0.6000:517 million NZD,-0.6025:521 million NZD.
- EUR/GBP:-No expiry data available.
Other Notable Market Movements
- The US Dollar Index falls to around the level of 97.30 in Asian trading due to concerns over tariffs and Fed Minutes highlighting worries about inflation and labor market strength.
- The People's Bank of China set the USD/CNY central rate at a lower level than the previous day's fix and Reuters estimate.
- The NZD/USD pair rose to around the level of .6010 in the early Asian session as the RBNZ kept its benchmark interest rate unchanged.
