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Forex traders said the rupee has been under continued pressure amid the Federal Reserve's cautious stance and the "Trump factor" driving up the dollar index (DXY) and US 10-year yields. Additionally, on the domestic front, slowing growth, widening trade deficit, and persistent foreign fund outflows have further fueled the rupee's depreciation. #Rupee #RupeeVsDollar #USDINR #forex #dollar #RBI #CrudeOil #sensex #economy #trade

With the Rupee testing a series of lows, it becomes crucial for the RBI to rely on aggressive FX intervention to restrain the exchange rate volatility. In the RBI bulletin of January 2025, the authors talk about buying/selling a currency in the forex market to manipulate the exchange rate of that currency against other foreign currencies. A fine example is the USD/INR buy/sell swaps during the 2013 Taper Tantrums. We see this happening in EMEs/developing countries- India, China, Japan. These interventions follow a ‘lean against the wind’ strategy- a case of tight monetary policy where RBI steps in to stabilise large swings in the Rupee. Let’s consider the BoJ in this scenario- An appreciation of the Yen will prompt the bank to buy US Dollars against Yen in the forex market. This is done through issuing financing bills (FBs). Contrary, when FX intervention is conducted by selling US Dollars against a large depreciation of the Yen, US Dollar funds are used to buy Yen. We have the spot and forward markets but interventions generally take place in the former to benefit from the T+2 settlement (more liquidity). RBI’s forex reserves have dipped from a peak of $705bn in Sept odd to $625 bn in Jan. A stock is said to have a deep market if it has high volume trades with a small spread (bid price - ask price). While, a security has a thin market if the trading volume is low with a wide spread. Even though India’s FX market has mostly been deep, it has become shallow during GFC, Covid, Yen-carry trade and so on.

Fluctuations in foreign currency assets are influenced by the RBI's interventions in the forex market and the valuation changes of the foreign assets held Read More: https://ow.ly/V0ea50UxvyW Annurag Batra | Noor Fathima Warsia | Tanvie Ahuja #CurrencyAssets #RBI #ForeignExchange #GlobalFinance #InvestmentStrategy

Our article on “Foreign Exchange Intervention: Efficacy and Trade-offs in the Indian Experience “ published in the RBI’s latest bulletin. Main finding: forex intervention contains the exchange rate volatility caused by portfolio flows.

The AUD/USD remained under pressure near 0.6540. Australian Q2 24 CPI is due on tomorrow, which can influence the market pricing for #interestrate policy change by the #RBA. In our view, despite the expectations of a future #ratehike by the RBA, issues with the local economy and Chinese economic woes persist, preventing any significant upward movement. We keep our opinion that as long as the currency pair is below 0.6585, the outlook for AUD/USD should remain weakness in short term. Fundamentally, #FOMC meeting on Thursday morning and the US #NFP on Friday, should provide some meaningful impetus to the pair. For more details, please reach out by support@ihfx.com.au #ihfx #fx #payment #aud #usd #hedging #treasury #forecast

📅 Weekly Economic Calendar Update for UTrada Forex Traders! This week is packed with key economic events that could significantly impact the markets. Expect significant market movements with key updates from the US, UK, and Australia, along with an important ECB Press Conference. Trade wisely and stay ahead with UTrada! 🌐📈  #ForexTrading #USD #GBP #AUD #EUR #MarketAnalysis #EconomicCalendar #ForexMarket #TradeSmart #UTrada #ForexNews #WeeklyUpdate

The rupee has faced notable depreciation amid sharp falls in FX reserves, leading to debates on exchange rate stability. Data suggests that after periods of stability, the currency often experiences volatility. Recent trends indicate a possible shift in RBI's strategy. https://mybs.in/2eju1NE

Forex Today: NZD/USD remains vulnerable to some Trump hedges – ING To learn more about this, check out our blog: https://lnkd.in/gG8gZpmi Risk Warning: Trading involves risk. Past performance is not an indication of future results. #ExclusiveMarkets #Trading #TradetheMarkets #Investment #NZD #USD #ING

#AUDUSD briefly rose to 0.6540 following the #FOMC widely expected no change decision. The post‑meeting statement highlighted concerns around the recent stronger #inflation readings, while Chair #Powell downplayed further #ratehikes for now. In our view, markets were at new peak hawkishness before the meeting. It is a relief on the margin that Powell pushed back on hikes and kept #easing bias. We still hold #highforlonger and we expect #interestrate cutting cycle will be more modest, which raises the risk the #USD remains stronger for longer. It worth noting that most currencies again #yen fell sharply this morning. It is widely speculated that the Japan’s Ministry of Finance (#MoF) may have intervened again after the #USDJPY rose as high as 160.17. AUD/JPY is around 101.60 level. The question is how the MoF manage the uphill battle with wide interest rate differentials and healthy #riskappetite. #ihfx #internationalpayment #crossboardpayment #hedging #currencymanagement #treasurymanagement

CBN forex market unification successful – Rewane https://lnkd.in/duAMy8rZ Exchange rate stability is fundamental to trade and industrial sector stability. This is a good omen. Although the net effect on price stability and inflation rate moderation is yet to be seen. Fingers crossed!