Indian Rupee gives back its early gains against the US dollar ahead of key Fed interest rate decision. At one point Indian Rupee rose to a one-month high against the greenback after it touched a low of 70.44. The USD/INR exchange rate finished the previous trading day up at 70.675 and was quoted during the London trading hours around 70.830.
The normal foreign fund inflow and outflow seems the most reasonable driver of the recent move in the currency market. Indian Rupee’s gains were only interrupted by funds buying the US Dollar. And, while the dollar strength faded against key global currencies, it kept its gains against an Indian Rupee that was lacking clear direction.
The dollar index, which gauges the greenback’s strength against a basket of major currencies closed the previous trading day indecisive near its opening price at 97.73
During the Asia trading hours, the NIFTY 50 was quoted around 11883 after it gaped higher at the opening price. The Indian 10-year government bond yield has registered a 1.44% surge being quoted around 6.778.
According to a CNBC Fed Survey of fund managers, approximately 80% of the respondents expect the US Federal Reserve to cut rates on its monetary policy later today. The rate cut will be delivered to diminish the risk of a global slowdown in trade due the US — China trade war tensions.
“If business investment is substantially more negative, you’re into the world where you’re looking at another rate cut in December,” said Tim Duy, professor at the University of Oregon — citing FT.
USD/INR Technical Pattern
The USD/INR exchange rate continues to remain range-bound, but there are high chances the Fed to disrupt the volatility across global currencies and motivate break below the key support level 70.350 and possibly see another attempt to break below the big psychological number 70.000.
On the upside, traders should eye the key resistance level established around the 71.000 level.
