- Indian Rupee (INR) is supported by upbeat RBI comments
- The RBI sees growth being maintained in the coming fiscal year
- US Dollar (USD) falls ahead of the FOMC rate decision
- A 25 basis point hike is expected this week
The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady on Wednesday after solid gains in the previous session. The pair rose 0.2% yesterday, settling on Friday at 82.67. At 10:00 UTC, USD/INR trades -0.03%% at 82.65 and trades in a range of 82.63 to 82.89.
The repairs holding steady in cautious trade ahead of EU S Federal Reserve right decision which comes after comments from the Reserve Bank of India. The RBI said in its bulletin released on Tuesday that the Indian economy is gathering pace and is unlikely to face any major impact from the recent global financial turmoil.
The RBI the Indian economy to maintain the pace of expansion achieved in 2022 – 23 which is expected to be 7%.
The US Dollar is steady against the Rupee but is falling against its major peers . The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.24% at the time of writing at 103.01, marking its fifth straight days of declines.
The US dollar is falling as investors look directly ahead to the Federal Reserve monetary policy decision later today. According to the CME MarketWatch the market is pricing in a 90% probability but the Fed will hike interest rates by 25 basis points, taking the rate to 4.75%-5% range.
Inflation still three times the feds 2% target the central bank will be keen to raise rates. however they will also be aware of the recent turmoil in the banking sector caused by the steep tightening cycle. The Fed is in a difficult spot, which has forced the market to re-price rate hike expectations lower from 50 basis points just two weeks earlier.
In addition to the rate hike, investors will be looking at the quarterly projections and the dot plot for clues on where the path of future rate hikes maybe going. The market is currently expecting thee US central bank to cut interest rates by 0.5% by the end of the year.