Weekly View of Currency Market

Market Outlook
The Indian rupee strengthened against the US dollar ahead of the US employment report due later on Friday on account of selling of American currency by banks and exporters amid concerns over a possible rate hike by the US Federal Reserve. Government bonds rose on Thursday, as a slump in crude oil prices and lackluster Fed minutes lifted investor appetite amid supply of fresh debt.
US fed Minutes showed Fed officials continued to view gradual interest-rate increases as appropriate while starting the process of unwinding their $4.5 trillion balance sheet this year.

Fundamental News
• Dollar hits 7-week high vs yen as BOJ eases, payrolls eyed.
• UK industrial production drops unexpectedly in May.
• UK Annual house price growth eases to 2.6%.
• Japan’s Consumer Sentiment Weakens Unexpectedly In June.
• Caixin China General Manufacturing PMI climbed back into positive territory in June.

Global Updates
• U.S. jobless claims climb 4,000 to 248,000.
• US created 158K private-sector jobs in June vs 185K jobs expected: ADP.
• UK construction sector recovery loses momentum in June.
• UK manufacturing growth slows at end of second quarter.
• U.S. factory orders fall; core capital goods orders revised up.
• United Kingdom Total Trade Balance below forecasts (£-2.5B) in May: Actual (£-3.073B).
• Eurozone manufacturing upturn gains further momentum as PMI hits 74-month high.

USDINR last week gradually slowed down due to Rupee appreciation and finally settled on a flat note with slight negative bias. Now, if the pair closed below 64.6500 then it may further drag towards deeper side whereas 65.1500 may continue to act as important resistance.

EURINR last week was unable to sustain at higher levels and dropped down in early part of the session. The support so seen from current levels is around 73.0000 while 74.5500 might continue to act as stiff resistance for the counter to move northwards.

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