 |
Foreign investors are dumping the Indian rupee ahead of the key RBI interest rate decision. On the currency market, the Rupee depreciated by 15 paise settling at 71.68 (New York close based-price) against the US dollar.
During the early Asia trading hours and after the London open, the USD/INR exchange rate was seen quoted within a range of 71.70 — 71.59, as the selling INR pressure paused.
Tuesday’s trading session saw the USD/INR exchange rate fluctuate within the range of 71.41 — 71.72. The dollar index continued on its downward path and lost more ground settling at 97.73, registering a -0.16% loss.
Most Wall Street analysts forecast another rate cut that will be delivered by the Reserve Bank of India RBI tomorrow 5 December. If the RBI cuts the benchmark interest rate it will be the six consecutive cuts since the beginning of the year. After lackluster GDP figures, which only grew by a modest 4.5%in the second quarter of 2019-2020, it’s widely expected a change in the RBI monetary policy to promote growth that has continued to disappoint.
In other news, the US President Donald Trump suggested that the US-China trade deal can be delayed until after the 2020 US Presidential election. The news triggered a risk aversion tone in the market, which saw the S&P 500 tumbling to a four-week low after it touched 3069.50.
“In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now and we will see whether or not the deal is going to be right,” Trump said during a NATO press conference in London.
The domestic benchmark equity index NIFTY 50 followed the lead of the US index and tumbled to a new low for the week settling at 11994. During early Asia trading hours, NIFTY 50 continued to slide and was seen trading at a low of 11951. The Indian 10-year government bond yield was seen quoted at 6.46 versus 6.47 previous closing prices.
|