India's central bank purchased a net $561 million in the foreign exchange market in June, a significant reversal from heavy net sales in the prior two months, according to its latest data. The move followed policy measures aimed at stabilizing the Indian rupee.
The rand gained against a softer U.S. dollar, supported by a risk-on mood in emerging markets, even as a key domestic economic outlook indicator fell for the third consecutive month.
German bond yields declined on Wednesday, as a significant drop in crude oil prices eased inflation fears, overshadowing hawkish statements from a key European Central Bank official.
The U.S. dollar saw modest gains as traders awaited key inflation figures, while the Australian dollar rallied sharply after a stronger-than-expected consumer price index report fueled bets for another rate hike.
UBS has raised its price targets for the EUR/SEK currency pair, arguing the Swedish krona's low-yield status is a significant headwind despite strong domestic fundamentals. The bank maintained a more constructive outlook on the Norwegian krone, citing its attractive interest rate differential.
The Australian dollar strengthened significantly after July's consumer price index came in hotter than expected, fueling bets on another RBA rate hike. Meanwhile, the U.S. dollar and other Asian currencies held steady as investors awaited key PCE inflation data for clues on Fed policy.
The South African rand gained against the U.S. dollar on Tuesday, supported by broad emerging market strength and higher commodity prices, even as a central bank report showed a third consecutive monthly drop in domestic business conditions.
The Reserve Bank of India purchased a net $561 million in the spot foreign exchange market in June, a reversal from heavy net sales in the prior two months, according to its latest monthly bulletin. The shift follows policy measures that stabilized the rupee after it hit a record low in May.
Strategists at Citi do not expect Federal Reserve Chair Kevin Warsh’s remarks at the Jackson Hole symposium to provide a hawkish surprise, suggesting the U.S. dollar's selling trend will likely continue.
