The drop in GDP rankings came as South Korea posted a nominal economic growth rate of 1.4 percent in 2019
South Korea has been persuading firms to go home, but many were hesitant due to stringent regulations and higher costs
The increased spending is seen as a preparation to secure competitiveness after the coronavirus pandemic
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.