Dollar up after ECB decides to stand pat at policy
Dollar/rupee and the dollar index traded higher during early Asian trade Friday following the European Central Bank decision to keep interest rates and to leave stimulus unchanged at policy.
European Central Bank left its key interest rates unchanged for a fourth consecutive session and retained its asset purchases. However, the decision was in line with the economists forecast.
The greenback gained post the ECB monetary policy decision on Thursday.
The European Central Bank left all of its key interest rates unchanged, holding off on shifting its main policy levers, even as inflation in the 19-country currency bloc remains stubbornly low nor did the central bank announced changes to its asset purchase program in its regular rate call.
The ECB said that the Governing Council confirmed that its monthly asset purchases of EUR80 billion will run until end of Mar 2017 or beyond if necessary.
Meanwhile, ECB President Mario Draghi said the central bank staff had cut slightly their quarterly forecast for eurozone growth over the next three years. He blamed external turbulence, including Britain's vote in June to leave the European Union.
But "for the time being, the changes are not so substantial as to warrant a decision to act," said Draghi. He urged governments to help out the ECB by implementing economic overhauls and boosting spending where possible.
Technical, USDINR traded in between 66.60-66.68 small range and settled at 66.5950 almost flat. On the EOD chart a long bearish candle stick is yet indicating for bearishness in the pair.
Further, in near term 66.50 will act as a crucial support and USDINR would need to trade below 66.50 in order to test 66.15-66.00, else failure of the breakdown could result momentum gain towards 66.75-66.88.
EUR-INR Future
The euro rose to two-week highs against the dollar after European Central Bank President Mario Draghi said there was no discussion about extending quantitative easing beyond March 2017 at the bank’s Thursday meeting.
EURINR extended it’s upwards move and after hitting a high of 75.26 settled at 75.2150 levels. Three white soldiers candle stick formation on EOD chart is indicating for further upside move in the pair. Immediate resistance is seen at 75.35 and pair would need to trade above this level in order to test 75.55-75.80.
else, probability for correction towards 74.85-74.60 could arise with stop loss above 75.35
GBP-INR Future
Pound traded higher Thursday on weak dollar as investors lower their expectations for a Federal Reserve rate hike in the near term ahead of the European Central Bank monetary policy decision.
After hitting a low of 88.80, GBPINR saw small pullback and tested 89.0425 before closing at 88.97 levels. Intraday price action resulted in formation of high wave candle stick which is indicating for indecisive trend in GBPINR.
Massive resistance is seen at 89.35 and sustained trade above only will expect to test 89.55-89.80. On the downside, crucial support is seen at 88.80 and probability for correction will increase below this level for the target 88.50-88.35.
JPY-INR Future
Yen pare losses during late Asian trade Thursday after Bank of Japan's deputy governor Hiroshi Nakaso said the central bank would not rule out deepening negative interest rates or any other easing steps needed to achieve its price target.
JPYINR traded in between 65.50-65.65 range and settled at 65.5150 levels. Intraday price action resulted in formation of high Doji candle stick is indicating for indecisive trend in JPY.
Further pair would need to trade above its immediate resistance 65.70 in order to test 66.00-66.25.
Failure of the break could bring correction towards 65.00-64.80.
§ Major Economic Data & Events Schedule today
Time
|
Currency
|
Economic Indicators
|
Forecast
|
Previous
|
Possible Impact
|
5:20am
|
JPY
|
M2 Money Stock y/y
|
3.30%
|
3.30%
|
Neutral
|
7:00am
|
CNY
|
CPI y/y
|
1.70%
|
1.80%
|
Negative
|
CNY
|
PPI y/y
|
-1.00%
|
-1.70%
|
Negative
| |
10:00am
|
JPY
|
Tertiary Industry Activity m/m
|
0.40%
|
0.80%
|
Negative
|
11:30am
|
EUR
|
German Trade Balance
|
21.2B
|
21.7B
|
Negative
|
12:15pm
|
EUR
|
French Gov Budget Balance
|
-
|
-61.8B
|
-
|
EUR
|
French Industrial Production m/m
|
0.20%
|
-0.80%
|
Positive
| |
2:00pm
|
GBP
|
Goods Trade Balance
|
-11.7B
|
-12.4B
|
Neutral
|
GBP
|
Construction Output m/m
|
-1.00%
|
-0.90%
|
Negative
| |
GBP
|
Consumer Inflation Expectations
|
-
|
2.00%
|
-
| |
All Day
|
EUR
|
Eurogroup Meetings
|
-
|
-
|
-
|
5:15pm
|
USD
|
FOMC Member Rosengren Speaks
|
-
|
-
|
-
|
7:30pm
|
USD
|
Wholesale Inventories m/m
|
0.10%
|
0.30%
|
Negative
|
