India Rupee Slips On Crude Oil Surge; FX Swap Auction Weighs

2 April 2019 / Morning Brief

Indian Rupee

• The Indian rupee little changed at 69.27 pair now at 69.30 against 69.3450 previous close.
• Pair to tip in 69.20-69.50 range today.
• The Indian rupee fell against the dollar in early trade tracking a jump in crude oil prices, while a second tranche of foreign exchange swap auction also weighed on investor sentiment. Higher crude oil prices have renewed concerns of widening of the nations’ trade deficit. The RBI’s announcement of FX swap auction, though seen neutral for the spot, is weighing on sentiments as it will suck out dollar liquidity, indicating that the central bank is not comfortable with further appreciation in the local unit.

Global Currency

• The dollar hit a two-week high against the yen on Tuesday, as ebbing concerns about the global economy pushed U.S. bond yields up from 15-month troughs. U.S. Treasuries were sold and their yields had surged overnight, with the benchmark 10-year rate rising more than 8 basis points, as encouraging manufacturing data out of the United States and China spurred some investors to scale back their holdings in safe heaven.
• The euro was down 0.1 percent at $1.1205 EUR= . The single currency brushed $1.1198, its lowest since March 8, and was headed for its sixth straight day of losses. The pound continued to move back and forth on Brexit-related developments.

Global Markets

• Oil prices rose to fresh 2019 highs on Tuesday, supported by firm Chinese economic data that eased demand concerns, the possibility of more sanctions on Iran and further Venezuelan supply disruptions. Brent crude rose 32 cents, or 0.5 percent, to $69.33.
• Gold prices slipped to a more than three-week low on Tuesday as waning global economic slowdown concerns lifted the dollar and equity markets. U.S. gold futures GCcv1 were down about 0.2 percent at $1,291.30 an ounce.

Global Markets at one Glance

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