A Weaker US Dollar Leads to Gold Price Gains
The US dollar fell to a four-month low of 93.1 on May 15, mainly due to weak US economic data. US consumer confidence also fell by the most we’ve seen in over two years, pointing toward less positive prospects for US economic growth ahead. Weak data also deferred the likelihood of a rate hike, which is negative for the US dollar. As well, a narrowing of the spread between US and German bond yields led investors to the euro, further hurting the US dollar.
USD/CAD re-approaches 5-week highs in early trade
Investing.com – The U.S. dollar edged up against its Canadian counterpart on Monday, re-approaching a five-week high as demand for the greenback remained broadly supported by Friday’s U.S. inflation data. Trading volumes were expected to remain thin with markets in the U.K., Germany and the U.S. closed for holidays.USD/CAD hit 1.2308 during early U.S. trade, the session high; the pair subsequently consolidated at 1.2294, adding 0.12%. The pair was likely to find support at 1.2173, the low of May 22 and resistance at 1.2329, the high of April 16.
The dollar strengthened broadly on Friday after data showed that U.S. core consumer prices rose 0.3% in April and were 1.8% higher on a year-over-year basis, the largest increase since October.
Lanka reserves expected to boost from Indian currency swap
Sri Lanka’s official reserves are set to receive a boost by the currency swap arrangement with India, signed during Prime Minister Narendra Modi’s visit, the country’s Central Bank said today.
During his visit to Sri Lanka last month, Prime Minister Modi had pledged USD 1.5 billion in financial assistance on a currency swap arrangement. The Reserve Bank of India and Central Bank of Sri Lanka agreement will help Sri Lanka keep its Rupee stable. The Sri Lankan Rupee has been under pressure since early January and has fell around 1.5 per cent so far this year despite Central Bank action to sell dollars to defend it.
Euro at 1-month lows against firmer dollar
The euro slid to one-month lows against the stronger dollar on Monday after U.S. data showing that consumer prices rose for a third straight month in April, as concerns over Greece continued to weigh on the single currency. EUR/USD slid 0.35% to 1.0974, the lowest level since April 29.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Expectation | Previous |
| 6:00 PM | USD | Core Durable Goods Orders m/m | 0.50% | 0.30% |
| 7:30 PM | USD | Durable Goods Orders m/m | -0.40% | 4.70% |
| 7:30 PM | USD | CB Consumer Confidence | 95.2 | 95.2 |
| 7:30 PM | USD | New Home Sales | 501K | 481K |
| 10:00 pm | USD | FOMC Member Fischer Speaks | -1.3M | -2.2M |
USD- For the day , we would focus on the New home sales and Consumer confidence number, we assume it might come with the expectation, hence it wont create any significant move for the currency.
| Technical touch : |
As seen pair has pierced its prolonged weekly symmetrical triangle , where price is about throwback till its falling trend line support levels which is 63.10-63.20 levels.
For the next few sessions we assume pair might remain in a band of 63.96– 63.40 levels.
Support is expected to be around 63.40/50 levels and resistance 64.00/30 levels.
EUR INR
After a prolonged downtrend pair tried to form its base and RSI moved into bullish territory.
As seen RSI is trading near its rising trend line. Hence we assume INR might appreciate till 70.55/40 levels
Support is expected to be around 70.38/69.90 levels and resistance 71.63/78 levels.