USD/INR breach Rs 69/$1 level on likely FPI outflows from local debt after RBI policy outcome

The rupee settled at 69.16 against 69.4250 at the previous close. The local unit moved in 68.52-69.20 per dollar band intra-day.
Dollar/rupee breached Rs 69/$1 Thursday on likely FPI outflows from local debt after release of Reserve Bank of India's first bi-monthly monetary policy for 2019-20 outcome. There are FPI outflows from local debt after the RBI cut repo rate by 25 basis but kept its stance unchanged at 'neutral'. Market expected a dovish stance with few investors expecting more than 25 bps rate cut," said a dealer with a private sector bank. The 7.26%-2029 traded at Rs 99.45 (7.33%) compared to the previous close of Rs 99.91 (7.27%).

The dollar is a little weaker in early trading in Europe Thursday as the euro shrugs off a disappointing set of factory orders in Germany that bode ill for a quick turnaround in the euro zone’s largest economy. New orders to German manufacturers fell by 4.2% in February, the biggest monthly drop in two years, with the steepest drop coming from foreign markets outside the euro zone.
The euro fell to a session low on Thursday after a report that Italy will slash its growth forecasts prompted fears about a broader economic slump. Political wrangling over the finances of heavily indebted Italy has seen the euro weaken versus the dollar. Reuters reported on Wednesday that Rome will this month likely cut its 2019 growth estimate to 0.3 percent or 0.4 percent.

Oil prices fell for a second day on Thursday, with Brent briefly edging below $69 per barrel because of rising inventories and production in the United States, but losses were limited as supply tightened elsewhere.
Gold inched higher on Thursday as stock markets retreated from multi-month highs following weak data from Germany, while investors awaited clarity on the progress of U.S.-China trade talks.

Research