USDINR and Global markets – morning update

23rd July 2021

INR is likely to open around 74.45/50

Yesterday was a calm day in currency markets and the USD remained stable. EUR is at 1.1770 after being higher at 1.1830 post ECB meeting. USDJPY is at 110.20. US equities ended slightly positive while Indian equities rode the previous day’s optimism and ended 1.2%+. US yields remained in a tight range. ECB meeting was fairly dovish in that they changed their inflation forward guidance higher and did not even mention tapering.

USDINR remains in a range, waiting for the next leg of the move. Yesterday’s sudden increase in US jobless claims did lead to some concern on a potential slowdown in economy, but was then ignored. Covid related concerns remain lurking as are the inflation fears. Until the next week’s FOMC, the base case remains that of a range-bound INR.

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