KEY SUPPORTS AND RESISTANCES

	S2	S1	Current  Level	R1	R2
USD/INR	94.60	95.40	95.79	95.85	96.10
EURUSD	1.1580	1.1610	1.1633	1.1705	1.1740
GBP/USD	1.3395	1.3325	1.3470	1.3495	1.3515
USD/JPY	159.18	159.36	159.87	160.05	160.50

Spot rupee opens at 95.70/71 to a dollar versus 95.71/72 previous close. The government has approved an ordinance to relax tax rules for certain types of Foreign investors in Indian bond markets to encourage foreign fund inflows. The RBI may announce the details and measures to be takenwhen they conclude the MPC meeting tomorrow. Equity market benchmarks are trading about 0.2% lower in early trades.
US economic data released overnight pointed to a resilient economy, stronger labour market, and persistent inflation pressures, leading markets to expect a higher likelihood of another Federal Reserve rate hike. DXY rose to 99.4, its highest level in about two months, supported by stronger-than-expected economic data and rising geopolitical tensions in the Middle East. US 10-year Treasury yield climbed to 4.49% as investors increased bets on tighter monetary policy. ADP employment report showed that Private employers added 122,000 jobs in May, above expectations (117,000) and the strongest gain since January 2025. Hiring was broad-based, though information and mining sectors lost jobs. Wage growth remained elevated at 4.4% for existing workers and 6.6% for job switchers. ISM Services PMI increased to 54.5, showing faster growth in the services sector. However, the employment component remained in contraction, while prices rose to their highest level since August 2022, signalling inflation concerns. Factory orders surged 4.8% in April, the largest increase in 11 months, driven mainly by transportation equipment and aircraft orders. Businesses appear to be front-loading purchases amid concerns that Middle East tensions could raise costs further.
Markets now assign an 85% probability of a 25-basis-point Fed rate hike by year-end, up from 60% a week ago.
Importers: Hedge payables upto June end and I half of July near or below 94.50
Exporters: Gradually increase your hedge for your exposures near or above 95.80 levels.

Important data releases scheduled today: UK: Const. PMI; EZ: Retail Sales m/m; US: Challenger Job Cuts y/y; Weekly Unemployment claims; Revised Non farm productivity q/q; Revised labour costs q/q;