Pre-Market Updates and Expectations: Pre-Market Updates and Expectations July 12, 2023

Pre-Market Updates and Expectations July 12, 2023

Welcome to our daily pre-market update, where we comprehensively analyze the Indian rupee’s performance in the currency markets. In this article, we will delve into the previous day’s trading session, examining the critical movements of the rupee against major currencies such as the US dollar (USD), British pound (GBP), Euro (EUR), and Japanese yen (JPY). Additionally, we will offer insights into what we can expect from the rupee in today’s trading session.

Date- July 12, 2023

Place- New Delhi, India

USDINR (82.47, down 17 paise)

The rollercoaster that is USDINR took a swift plunge at the day’s opening, quickly steadying to hum along the 82.40 track. This tug-of-war between rally and retreat saw the currency pair swing from 82.00 to a daring peak of 82.75 before regaining its balance at 82.40. With the Reserve Bank of India potentially stepping in to calm the frenzied selling pressure, we’re setting our sights on a future of stable, range-bound movements.

GBPINR (106.45, up 85 paise)

Breathtakingly close to scaling its all-time peaks, GBPINR saw a windfall gain of more than one rupee today. It took a breath towards the end, indulging in some profit-taking. But, propelled by an astonishing wage growth of 7.3% (sans bonuses) that stole the limelight from the UK’s rising unemployment rate (4% in the lead-up to May), GBPINR ended the day with a proud strut. We’re already on the edge of our seats, anticipating tomorrow’s potential surge!

EURINR (90.71, up 16 paise)

EURINR wrapped up the day with a slight swagger, courtesy of minor gains. The pair shrugged off the grimacing economic sentiment in Germany, echoed by the downturn in the German ZEW, marching ahead nevertheless. As we gaze into tomorrow’s crystal ball, we see EURINR deftly navigating within a tight range, subtly leaning towards a climb.

JPYINR (58.94, up 70 paise)

In the world of forex, JPYINR was the day’s high-flyer. The pair soared higher, fuelled by vigorous short covering, as the feeble US Dollar and yielding US yields made JPY an irresistible target. And as we prepare for tomorrow’s journey, we’re all buckled up to continue this thrilling ascension!

Key Points to Consider Today

As we dive into the world of financial markets, it’s crucial to understand the current scenario and the potential future trends. Let’s take a look at the Indian market scene.

The Indian markets might just start the day with a flat or mildly higher opening, mimicking the mostly higher Asian markets and the positive trends from the US markets on July 11.

In the US, the markets ended Tuesday on a high note. Investors are gearing up for Wednesday’s inflation report, hoping for a strong kick-off to the second quarter’s corporate earnings later in the week. Treasury yields are also on a slight retreat, with the 10-year Treasury yield falling 2.6 basis points to 3.980% on Tuesday.

Coming up on Wednesday is the June US consumer-price index report, which is expected to reveal a drop in headline annual inflation to 3.1%, a decrease from the high point of 9.1% a year earlier. But, it’s worth noting that the annual core inflation—which omits fluctuating elements like energy and food prices—is anticipated to be at a more elevated level of 5%.

The trading community is predicting a more than 90% probability that the Federal Reserve will hike its benchmark interest rate in July, with over a 30% chance for an additional increase by year-end.

On the home front, the Consumer Price Index (CPI) for June in India is due for release. The general prediction is that retail inflation could see a surge in June, primarily due to rising food prices. In May, consumer inflation saw a cool down to 4.5%, marking a 25-month low. June, however, is expected to witness a slight rise after four months of decline, with CPI inflation forecasted to increase by 4.49% year-on-year and 0.75% month-on-month.

Recent data from China displayed a surprising surge in bank lending in June, aided by the central bank’s efforts to prop up an economy still grappling with pandemic restrictions.

Asian stocks exhibited mixed performance in anticipation of the US inflation report, which will play a pivotal role in shaping the interest rate outlook for the world’s largest economy.

For Nifty, keep a close eye on the 19300-19523 range, as it stands as the key support and resistance. A move above 19523 could signal a resumption of an uptrend, while a dip below 19300 might indicate a potential correction. Let’s continue to monitor these trends and understand the impact they could have on our financial decisions.


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