Market Highlights & Commentary:
- INR opens stronger at 70.94 against yesterday close of 71.12 and may trade the day between 70.80-71.13 under two way price action.
- Yesterday U.S central bank Fed ended the monetary policy meeting keeping up with market expectations and maintaining status quo. The Fed chair pointed in the light of slowing economy and lower inflation, possibility of rate hike seems to be low. He also hinted to soon end balance sheet shrinking program.As a result, USD fell sharply against against other major currencies post to the news. Now we are clear that recent gains in Gold were pointing to USD weakness and not to risk aversion.
- Today most other currencies are stronger by 0.5-1% but INR is strongly marginally. It indicates that market is already discounting risks from Budget and elections.
- We also hear from market that Arcelro Mittal–Essar issue to be positively concluded before March with high probability that Arcelor may get the deal. This event would bring USD inflow of about 9-10 bn and would result in sharp INR gains closer to the event date. We are tracking it closely.
- The focus is now shifting to tomorrow budget and U.S NFP data.
- This morning most of the Asian equities mixed and currencies are strong.