19 Jun 2022

INR depreciation can accelerate on flat UST yield curve

The INR touched record lows against the USD last week on the back of a selloff in equities on worries of stagflation/recession in the US given a flat UST yield curve. INR is likely to touch Rs 80 to the USD on continued sell off in equities.

author dp
Team INRBonds
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       US Fed hiked interest rates by 0.75% during its June 2022 policy-meeting, which is the most aggressive rate hike since 1994. Another 50 or 75 bps hike is expected in its next meeting.

       Bank of England raised interest rate to 1.25%.

       INR touched record lows of 78.17 vs US dollar.

       1 year forward premium of USDINR are at 2010 lows of 263 paisa.

       Domestic inflation stood at 7.04% in May 22.

       Japanese Yen depreciated by 0.41% against USD.

       Dollar Index rose by 0.41%.

 

 

 

Currencies

17-Jun-22

10-Jun-22

Weekly Return

DXY

104.46

104.235

0.22%

AMERICAS CURRENCIES

 

 

 

USD-BRL

5.1534

4.9875

-3.22%

EUROPE, MIDDLE EAST & AFRICA CURRENCIES

 

 

 

EUR-USD

1.0502

1.0517

-0.14%

GBP-USD

1.2225

1.2313

-0.71%

USD-RUB

56.41

56.8

0.69%

ASIA-PACIFIC CURRENCIES

 

 

 

AUD-USD

0.6935

0.7052

-1.66%

NZD-USD

0.6341

0.6360

-0.30%

USD-JPY

134.96

134.4

-0.41%

EUR-JPY

141.66

141.37

-0.20%

USD-KRW

1,291.58

1,279.24

-0.96%

USD-PHP

53.76

53.06

-1.30%

USD-IDR

14,823.00

14,552.50

-1.82%

USD-INR

77.96

78.18

0.28%

EUR-INR

81.85

82.18

0.40%

USD-CNY

6.72

6.71

-0.15%

USD-MYR

4.40

4.40

0.00%

USD-THB

35.23

34.73

-1.42%

 

Countries

17-Jun-22

10-Jun-22

Weekly Change (bps)

US

3.23%

3.17%

7

Japan

0.31%

0.25%

6

UK

2.50%

2.45%

5

Germany

1.66%

1.50%

16

Portugal

2.69%

2.75%

-6

Italy

3.67%

3.83%

-16

France

2.20%

2.07%

13

Greece

4.03%

4.38%

-34

Spain

2.74%

2.73%

1

Brazil

12.83%

12.79%

4

Russia

8.92%

8.89%

4

China

2.83%

2.82%

1

South Africa

10.24%

10.20%

4

Australia

4.09%

3.77%

32

India

7.55%

7.52%

3

Indonesia

7.58%

7.31%

27

 

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