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USD/INR likely to rise above 65.0 from May, retreat post June’s FOMC meeting: Scotiabank

The USD/INR currency pair is expected to rise above 65.0 from May till June’s Federal Open Market Committee (FOMC) meeting and to retreat post the Federal Reserve’s June gathering. The pair is likely to consolidate at around 64.5 for now due to the Reserve Bank of India’s (RBI) two-way operations.

Foreign investors have pulled out funds from Indian equity markets after the RBI unexpectedly raised its reverse repo rate by 25 basis points to 6.00 percent on April 6, leading to a slightly weaker INR that underperform all regional peers except the KRW suffered from hovering geopolitical tensions. The 64.16 handle is now serving as a support level for USD/INR.

Since February 1, the INR has rallied on the back of the Union Budget with fiscal prudence, the RBI’s neutral monetary policy stance and increasing hopes for further economic reforms post the BJP’s victory in the UP assembly election. In the meantime, a broadly weakening dollar helped shore up the INR as well.

"We stay watching the result of the French presidential election that could be a game changer and are awaiting US Treasury Secretary Steven Mnuchin’s regulation relaxation due in June," Scotiabank commented in its latest research report.

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August 16 12:30 UTC Released

USHousing Starts Number MM

Actual

1.155 mln

Forecast

1.220 mln

Previous

1.215 mln

August 16 12:30 UTC Released

USBuild Permits: Change MM

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-4.1 %

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9.2 %

August 16 15:30 UTC 128128m

BRForeign Exchange Flows*

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0.361 Bln USD

August 16 23:50 UTC 628628m

JPForeign Bond Investment

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1624.2 bln JPY

August 16 23:50 UTC 628628m

JPForeign Invest JP Stock

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-37.7 bln JPY

August 16 23:50 UTC 628628m

JPExports YY*

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13.6 %

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9.7 %

August 16 23:50 UTC 628628m

JPImports YY*

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17.0 %

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15.5 %

August 16 23:50 UTC 628628m

JPTrade Balance Total Yen*

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392.0 bln JPY

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439.9 bln JPY

August 17 01:30 UTC 728728m

AUFull Time Employment*

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62.0 k

August 17 01:30 UTC 728728m

AUEmployment*

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20.0 k

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14.0 k

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