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USD/INR opens up on strong dlr as Fed Powell ruled out hopes of aggressive rate cut this year

1 August 2019 / Morning Brief

Indian Rupee

  • The Indian rupee little changed at 69.20 pair now at 69.10 against 68.78 previous close.
  • Pair to tip in 68.90-69.20 range today.
  • Dollar/rupee opened at one-month high Thursday tracking a strong dollar, which surged to a two-year high after the Federal Reserve Chairman Jerome Powell erased hopes of aggressive rate cut this year. Federal Reserve cut its benchmark interest rate by quarter basis point and Fed Chair said the 25-basis-point cut was not the same as the beginning of a lengthy rate cutting cycle. Dollar is strong after the Fed cut rates by 25 bps as expected and Fed Chair washed out hopes of aggressive rate cut, in the near term. The Federal Reserve cut interest rates on Wednesday for the first time since 2008.

Global Currency

  • Asia are buying the dollar on expectations that a less-dovish Fed will keep the dollar a higher-yielding currency. The stronger dollar will be “difficult” for emerging-market assets in the short-term, although central banks are still likely to cut rates if global growth slows.
  • The central bank trimmed interest rates on Wednesday, but disappointed many -- including the U.S. president -- as Powell said this wasn’t the start of a prolonged series of reductions. Before the announcement, many had wagered the Fed would be more dovish to match other major central banks concerned about a slowdown in global growth.

Global Markets

  • Gold prices dropped to two-week lows on Thursday after the U.S. Federal Reserve cut rates by 25 basis points as expected but tampered market expectations of a lengthy easing cycle, lifting the dollar to a two-year high.
  • Oil prices fell more than $1 on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of rate cuts and Sino-U.S. trade talks ended without progress.

Global Markets at one Glance

Markets Today In INR % Change
USD/INR 69.0725 69.08 0.31
EUR/USD 1.1051 76.33 0.07
GBP/USD 1.21298 83.78 0.14
USD/JPY 109.172 0.63 -0.1
SEK/INR 9.6815 7.1345 0.0076
DKK/INR 6.1658 11.2025 0.0325
AUD/USD 1.4598 47.29 0.11
1M 2.34763 -0.41543  
3M 2.50450 -0.35929  
6M 2.52088 -0.31129  
1Y 2.60925 -0.22029  
Index Today % Change
NIFTY 11037.00 -0.73
SENSEX 37212.20 -0.72
BANK NIFTY 28633.20 -0.86
SGX NIFTY 11051.00 -0.63
NIKKEI 21489.50 -0.15
HANG SENG 27588.00 -0.68
SHANGHAI 2909.63 -0.78
ASX200 6795.00 -0.26
DOW JONES 26864.30 -1.23
S&P500 # 2980.38 -1.09
NASDAQ # 8175.42 -1.19
Key Events of the Day
Date Time Currency Event Forecast Previous
1-Aug-2019 13.25 EUR German Manufacturing PMI (Jul) 43.1 43.1
1-Aug-2019 14.00 GBP Manufacturing PMI (Jul) 47.7 48.0
1-Aug-2019 16.30 GBP BoE Interest Rate Decision (Aug) 0.75% 0.75%
1-Aug-2019 19.30 USD ISM Manufacturing PMI (Jul) 52.0 51.7

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