USDINR and Global markets – morning update

28th October 2021

INR likely to open around 75.10/15

USD traded slightly stronger despite weak US durable goods data. EUR is at 1.590, GBP at 1.3725, but JPY strengthened to 113.80. US yields fell after the durable goods data which indicated a sagging growth. US GDP is expected today and can influence the currencies if seen to be falling more than expected. ECB meeting today is key for EUR and given the surging inflation in the EU, markets want to hear from the ECB on their stance around halting the bond purchases. Bank of Canada has officially halted their asset purchases and have signaled a rate hike soon. Also slated today is the BOJ decision, and they are expected to continue the status quo on asset purchases and rate stance.

DOW fell 250+ points yesterday, and the JPY strength reflected the risk aversion in trade. Nifty ended in the red by 0.3%. Brent fell sharply and is now trading at 82.40, a positive for INR. USDINR continues to meander along until a firm direction is apparent. Today’s ECB decision might not impact the pair much. Tomorrow’s US PCE data and the next week’s FOMC, US jobs release and trade deficit are the key focal points now. USDINR can be expected to drift with some upward bias today due to the mild risk aversion in markets.

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