USDINR- Fundamental, technical set-up remains bullish on higher top higher bottom formation; support at 81
时间:2024-09-27 19:08:58 阅读(143)
By Dilip Parmar
The week gone by was full of drama in the financial markets. A shock US inflation print sent stocks and bonds tumbling and then turning positive on Thursday only to have them jerk back in one of the most extreme days of trading since the Fed intervention of March 2020. The rebound was all the more surprising as it came out of the blue and seems to have been triggered by positioning rather than fundamentals. The Japanese currency tested its weakest level since the Asian crisis after the inflation data, only to rebound. While there were fireworks in the Japanese currency market, UK Prime Minister Liz Truss may have been disappointed with sterling’s reaction to her dismissal of Kwasi Kwarteng, a close friend and ally.
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USDINR Outlook
Fundamental and technical set-up remains bullish for USDINR amid higher top higher bottom formation. The pair is having near-term resistance at 82.90 and support at 81.95. The dollar index is likely to keep rallying until the current slowdown in the global economy is over, inflation peaks out and growth starts to accelerate again. Till that happens, the dollar will be the safest place.
Asian currencies are likely to be a tad weaker in near term as China’s party congress gives little in the way to economic policy changes. Chinese President Xi Jinping signaled no change in direction for two main risk factors dragging down China’s economy, providing little lift to a worsening growth outlook.
The dollar’s overall strength against major currencies will be sustained until real US yields start to fall and inflation peaks. The dollar is the most preferred currency by the traders so far this year and expected to remain for the rest of the year. Dollar Index, a basket of six currencies, has near term resistance at 115 and 121 while on the lower side 109.90 will act as support.
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CFTC Positioning
The flow was mixed as the aggregate dollar position was largely unchanged from the prior week. Specs were buyers of yen (4.2k), sterling (10.4k), CHF (1k), and MXN (3.7k) while selling euros (6.2k), CAD (4.3k), AUD (3.5), and NZD (5.1k).
(Dilip Parmar, Research Analyst, HDFC Securities. Views expressed are the author’s own.)
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- tions and academic institutions have computed logistics costs, which are widely quoted to stress the point that India is a country with high logistics costs.” In addition to the ones I mentioned earlier, NCAER cites three—Armstrong and Associates (2017), an estimate of 13% of GDP; CII (2015), an estimate of 10.9% of GVA; and NCAER (2019), an estimate of 8.9% of GVA. Clearly, there are variations in what is being measured and how. This new NCAER report uses supply and use tables. What does it find? In 2021-22, logistics costs had an estimated range of between 7.8% and 8.9%. In 2014-15, they had an estimated range of between 8.3% and 9.4%. There has been a decline over time (with a transient increase in 2017-18 and 2018-19). It cannot be anyone’s case that this new NCAER report is the last word on the subject. But it is a beginning, with a clear methodology. And two points emerge. First, logistics costs aren’t as bad as they are often made out to be. Second, they have declined over time (also evident from LPI).
Logistics, good or bad, are driven by the states and the commerce ministry has a LEADS (Logistics Ease Across Different States) report, based on perceptions. The 2023 version was released in December. Since states are heterogenous, in the reporting, they are divided into four groups—coastal, landlocked, north-east, and UTs. States that do well are called achievers. Nomenclature matters. Thus, states that are middling aren’t called average. They are called fast movers. States that are sub-par are called aspirers. Let me highlight coastal states, since 75% of export cargo is estimated to originate from them. Among coastal states, ones that do well are Andhra Pradesh, Gujarat, Karnataka, and Tamil Nadu. The ones that lag are Goa, Odisha, and West Bengal. While India’s logistics performance may have improved over time, that’s not true of every state. Some have slipped. Most states have a state-level logistics policy, including Goa and Odisha. West Bengal, bottom of the pecking order in the coastal category, doesn’t have one. To quote from LEADS 2023, “Looking ahead, the State (West Bengal) could benefit from formulating a State Logistics Master Plan and State Logistics Policy to drive efficiency improvements and facilitate investments within the logistics sector and undertake consultation with the logistics stakeholders for educating and informing them about the initiatives State is undertaking for the development and improvement of logistics sector.”
Logistics has been talked about for a long time and India has also focused on improving performance. We are now getting some precise data on measurement and quantification. That helps.
Bibek Debroy, chairman, EAC-PM. Views are personal.
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