USD/INR opens down as govt maintain fiscal glide path, RBI rate cut hope

1 October 2019 / Morning Brief

Indian Rupee

• The Indian rupee little changed at 70.73 pair now at 70.76 against 70.8650 previous close.
• Pair to tip in 70.60-70.95 range today.
• Dollar/rupee opened down Tuesday after the government kept its fical deficit glide path of 3.3% of GDP for the current fiscal year unchanged amid rising expectations of rate cut by RBI. Government has kept fiscal deficit unchanged despite revenue loss. Rupee is supported by hopes of rate cut by the RBI. Government's decision to cut corporate taxes earlier in September paving way for RBI rate cut on Oct 4.

Global Currency

• Monsoon rains in India were 10% above average in 2019 and the highest in 25 years as seasonal rainfall continued longer than expected, the weather department said on Monday. Extra June-September monsoon rainfall will help farmers expand areas under winter-sown crops such as wheat, rice rapeseed and chick peas, improving their earning potential and helping revive tepid rural demand that has stung Indian economic growth.
• The U.S. dollar traded near its highest in almost two weeks versus the yen before the release of data that is forecast to show the U.S. manufacturing sector returned to growth, which would ease concern about the impact of the ongoing Sino-U.S. trade war. The euro teetered near its lowest in more than two years versus the greenback as weak economic data.

Global Markets

• Oil prices rebounded in early Asian trade on Tuesday after production at the world's largest oil producers fell in the third quarter, although demand concerns continued to keep a keep a lid on prices.
• Gold prices inched lower on Tuesday, hovering near the two-month low hit in the previous session, as uncertainties arising from the U.S.-China trade war bolstered the dollar.

Global Markets at one Glance

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