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USD/INR likely to rally through 70 temporarily amid a broad dollar strength, says Scotiabank

The USD/INR currency pair is expected to rally through 70 temporarily amid a broad dollar strength, according to the latest research report from Scotiabank; however, it also remains still moderately bullish on the INR on account of global reflation policies.

The RBI continued injecting rupee liquidity through USD/INR Buy/Sell FX Swap and Open Market Operations. The central bank’s liquidity injection could boost local equities and bonds, providing some needed support to the INR that has been suffering from elevated oil prices.

In addition to net purchasing Indian shares, foreign investors are expected to turn into net buyers of local debt once again. In the coming future, oil prices are likely to extend the rally to some extent, largely due to escalating geopolitical tensions, increasing net long oil futures positions and an oil curve backwardation, the report added.

Saudi Arabia’s energy minister Khalid Al Falih said at a conference in Riyadh on Wednesday that the nation will not rapidly ramp up its oil output after the US ended the sanctions waivers for buyers of Iranian crude, according to Financial Times. He added Saudi Arabia will not increase production pre-emptively.

Meanwhile, gloomy global growth outlook will prevent oil prices from increasing too much. South Korea’s export-driven economy shrank 0.3 percent q/q in the first quarter, missing market estimate of a 0.3 percent growth.

Earlier, the Bank of Canada slashed its 2019 GDP growth forecast to 1.2 percent from its January estimate of 1.7 percent. Brent crude exceeding USD80 per barrel will intensify pressure on the OPEC+ to calm oil-supply fears.

"We maintain our short USD/INR position targeting 68 while keeping a close eye on the ongoing general elections and oil prices," Scotiabank added in its comments.

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2019-05-27 02:34:53
0m

May 27 01:30 UTC Released

CNSales Turnover

Actual

-3.7 Percent

Forecast

Previous

13.9 Percent

May 27 01:30 UTC Released

CNTurnover/sales cum Y/Y

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-3.4 Percent

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Previous

-3.3 Percent

January 31 00:00 UTC 692832692832m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 692832692832m

ARAnnual Primary Balance*

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2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 704652704652m

ARTrade Balance

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Previous

-1541 %

January 31 00:00 UTC 692832692832m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 704652704652m

ARTrade Balance

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Forecast

Previous

-1541 %

January 31 00:00 UTC 692832692832m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 692832692832m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 692832692832m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

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