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USD (US Dollar)

PostMortem on BankNifty Today & Analysis of 15 JUN 2023 ExpiryThe beast in banknifty got unleashed today, after a long gap banknifty options really started surging today! You wont believe the OTM prices went above the traded range of Wednesday, that too today being an expiry day! --- BankNifty Weekly Analysis During the current expiry week 9th to 15th June, banknifty shed 556 pts ~ 1.27%. You may not believe that 544pts i.e 97% of that came just in today's trade. --- Today's Analysis We opened gapup right at the resistance level and then started falling. The first 5mts itself shaved off 200+ points. From there we had a steady falling day with no pull back. The selling really aggravated at 13.50 when all of a sudden lot of traders unwound short positions in PE. BN was near 43700 then, the volumes in PE did suggest that few traders were running for cover fearing their position may go deep ITM. This really fueled the next move. We fell another 300pts in 90mts.  Nifty50 was in green till then, see the blue highlighted area - the selling intensified in N50 too. Nifty50 at 10.00 was roaring past the resistance level of 18762 and was looking unstoppable. For the first time since Dec 2022, N50 tried to shoot for ATHs. Banknifty had other plans, may be attributed to the FOMC meeting yesterday - which we will discuss shortly. --- 15mts has now confirmed a break from the trading range, the last time it broke on the downside was on 24 May, which it recovered by 26th. The pick-up in momentum after the range break also signifies unfinished business ahead. --- 1hr TF also shows the range breakout, but the chart is not bearish yet. There are supports at 43253 & 43012 ahead. If banknifty is not stopping there - then it will be an interesting case for the July series. Remember we will have expiries on Fridays from 7th of July. The split of N50 and BN to separate days will definitely improve speculation. --- The curious case of FOMC rate pause Yesterday US FED decided to keep the interest rates at 5.25%. Our RBI has kept the interest rate at 6.50%. Lets just analyze what this interest means for a foreign institutional investor. Assumption: FII is investing in India's debt instruments & not equity Investor has earmarked 100000 USD for investments. In US over a 1 year period his investment will grow to 105250 USD. Whereas if he invests in India it will grow to 106500 USD. Now investment in India has to be done in INR, so there is a currency conversion risk. Lets just calculate how much was the USDINR appreciation for the financial year it was ~ 8.23% So now Mr. Investor has 97735 USD left with him i.e. a opportunity cost of -7.51% if he chose India over his home country. The best way RBI can tackle this issue is either get the USDINR to depreciate or hike the repo rate to have a higher divergence than FED rate. to view all 6 charts visit viswaram. com
NSE:BANKNIFTY
by viswaram
Market Reactions to Fed’s “Hawkish Pause” Market Reactions to Fed’s “Hawkish Pause” Today the Federal Reserve chose not to proceed with an 11th consecutive interest rate hike, opting instead to assess the effects of the previous 10 hikes. However, the Fed announced that it anticipates implementing two additional quarter percentage point increases before the year concludes. While the pause was largely expected, the fact that policy makers see rates at 5.6% at year-end was what caught the market off-guard. The combination of the pause with the suggestion of two more 25 basis points hikes has been dubbed the “hawkish pause”. Following the decision, stock market closing results were mixed. The Dow Jones closed more than 230 points lower, while the S&P 500 and the Nasdaq experienced gains of 0.1% and 0.4% respectively. The Nasdaq Composite was primarily bolstered by the gains made in AI-adjacent stocks of Nvidia and AMD. The day began with Bitcoin surpassing $26,000. However, it has since retraced to a 24-hour low of $25,791. Some analysts are predicting an inevitable drop to $25,000 based on recent cryptocurrency news that is dominated by discussions on regulation. Meanwhile, gold prices initially rose to touch $1959 per ounce in the session but later trimmed gains, trading around $1945. The dollar has weakened across the board, with the DXY down 0.32%. The NZD is the biggest mover, rising by more than one percent to a 3-week high of $0.6211. Gains in EUR and GBP were more modest, at +0.39% each.
BLACKBULL:XAUUSD
by BlackBull_Markets
5 Key Factors Shaping US Dollar Trading This Week5 Key Factors Shaping US Dollar Trading This Week The US dollar is in the midst of a week filled with pivotal events. Together, these fundamental drivers hold the key to understanding the potential shifts in the US dollar's performance throughout the week: - US President Joe Biden announced that a bipartisan agreement has been reached to raise the US debt ceiling of $31.4 trillion, aiming to avoid a default. He has now called on Congress to pass the deal asap. Fitch ratings will remove the “negative watch” rating on the United States when the deal passes or looks likely to pass congress. - The debt ceiling agreement has potentially weakened the safe-haven appeal of the US dollar, leading to an increase in risk appetite in global markets. - The Personal Consumption Expenditures price index, the Federal Reserve's favored inflation measure, rose by 4.4% in April compared to the previous year, up from the 4.2% increase observed in March. This development has raised the probability of a 25-basis-point interest rate hike by the Federal Reserve in June. - Due to the Memorial Day weekend in the US, as well as bank holidays in Europe and the UK, Monday will experience reduced market liquidity. Additionally, institutions are preparing for month-end trading on Wednesday, which could introduce more volatility. - The US payrolls report for May will be released on June 2nd. Recent months have consistently shown better-than-expected job figures. It is anticipated that this week's job numbers will indicate an addition of 180,000 jobs, with a slight increase in the unemployment rate to 3.5%. A tighter job market will reinforce the Federal Reserve's hawkish stance, with strong wage data also providing support if the actual figures surpass estimates.
TVC:DXY
by BlackBull_Markets
USDINR - bearish bias USDINR has taken nice resistance of the upper trend line. And selling pressure is building up since morning. Short term trade is to trade till lower line. To some one who wants to play for longer view may add shorts at each peak done like today. Once it starts trending lower trendline, down rally may start after a retest. Smart think to do will be add after first breakown below lower trendline retest. This will test a lot of patience. User Discretion - any drastic news from Gov may drive prices crazy
Short
by TradeStrikes
Why the Mexican Peso Surged Against the USD?Why the Mexican Peso Surged Against the USD? On Wednesday, the US dollar decreased in value against other major currencies, including the Mexican peso, by over 1%, due to reports of slower than expected US inflation. This suggests that the Federal Reserve may pause its interest rate hikes. According to data from the US Labor Department, inflation in April decreased to 4.9%, which is the lowest year-over-year increase in two years and lower than market forecasts of 5%. The slower inflation was attributed to slower growth in food prices and a further decrease in energy costs. However, core inflation remained high at 5.5%, indicating that interest rates may need to stay high for some time to control it. Fed funds futures traders are anticipating a pause before expected rate cuts in September, which might be a little optimistic, as the Fed's target range remains at 5% to 5.25%. The Mexican peso gained strength to 17.544, its highest value since July 2017, as the difference between US and Mexican monetary policies became more pronounced. The RSI on the USDMXN suggests it is in an extreme oversold condition, so a pullback may be necessary. Resistance levels from 2017 for the pair may no longer be relevant, but the strongest value the peso reached in 2017 was $17.430, while the peak in 2016 was $17.050. For fundamental context, Banxico increased rates to an all-time high of 11.25% in March, despite a decrease in annual headline inflation that was greater than expected. Mexico's proximity to the US has also made it an attractive location for foreign companies to open factories targeting the American market and diversifying production from China. Additionally, the US economy's robust state has led to a rise in remittances to Mexico from expats.
by BlackBull_Markets