Thursday 27 June 2013

The market

Indian Rupee Drops To Record Low Against Dollar, Gold Crash Accelerate

26 June, 2013

The unintended consequences of a centrally-planned world continue to peek through at the most unexpected of place, as moments ago the Indian Ruppe just plunged to a new all time record low against the USD, with the USDINR rising over 60 for the first time, triggering stops and overriding any potential USD selling intervention that the RBI may have attempted just below the resistance level which took place 59.985 according to Reuters.

A snapshot of events in India currently via Bloomberg:
  • Rupee drops 0.9% to 60.2250 per dollar; touches record 60.26.
  • USD/INR one-month implied volatility falls 32 bps to 11.60%; level suggests there is 68% chance rupee will drop to 62.2976 per dollar in a month (see that story here)
  • USD/INR risk reversal drops for third successive day, falling 17 bps to 1.80%; gauge of investor sentiment reached 2.23% last week, reflecting biggest pessimism on rupee in a year
  • Yield on nation’s 7.16% sovereign bonds due May 2023 rises 4 bps to 7.542%
  • One-year IRS falls 1 bp to 7.43%

Meanwhile the drubbing of gold and silver continues, with the yellow metal crashing to a three year low of $1224, down $50, silver down to $18.44, and the scramble to liquidate all metals into electronic pieces of "paper" accelerating.

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