Currency market: Diesel, LPG price hike may dent sentiment
In the domestic markets, the recent hike in diesel prices, kerosene prices and cooking gas is likely to dent the sentiment.
Updated:
KN Dey, Director, Basix Forex and Financial Solutions
The macro scenario in the international markets looks bleak and would trigger huge volatility in the financial markets. Markets are eyeing the Greek parliament’s vote on the €28-billion austerity measures scheduled for June 28. Greece is expected to pass the austerity measures or else it would result in a domino effect, reminding us of the Lehman crisis of 2008.
In the domestic markets, the recent hike in diesel prices, kerosene prices and cooking gas is likely to dent the sentiment. Against this backdrop, we expect equity markets to remain under pressure in the ensuing week. This rise in prices could further lead to the rise in inflation, inviting RBI to take further aggressive monetary actions.
Rupee would certainly take cues from the overseas markets and is expected to trade slightly weaker versus the US dollar. Furthermore, the month-end demand from oil importers would also put some pressure on Indian Rupee. We expect the USD/INR pair to trade in the range of 44.75- 45.25 in the ensuing week.
In the forwards, the forward dollar premia is likely to remain steady as there is no definitive trend seen in the bond markets with 10Y GOI Bond yield is expected to hover around 8.28%.
The macro scenario in the international markets looks bleak and would trigger huge volatility in the financial markets. Markets are eyeing the Greek parliament’s vote on the €28-billion austerity measures scheduled for June 28. Greece is expected to pass the austerity measures or else it would result in a domino effect, reminding us of the Lehman crisis of 2008.
In the domestic markets, the recent hike in diesel prices, kerosene prices and cooking gas is likely to dent the sentiment. Against this backdrop, we expect equity markets to remain under pressure in the ensuing week. This rise in prices could further lead to the rise in inflation, inviting RBI to take further aggressive monetary actions.
Rupee would certainly take cues from the overseas markets and is expected to trade slightly weaker versus the US dollar. Furthermore, the month-end demand from oil importers would also put some pressure on Indian Rupee. We expect the USD/INR pair to trade in the range of 44.75- 45.25 in the ensuing week.
In the forwards, the forward dollar premia is likely to remain steady as there is no definitive trend seen in the bond markets with 10Y GOI Bond yield is expected to hover around 8.28%.
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