Indian Rupee Falls As Upbeat U.S. Data Lifts Dollar, Oil Gains
12 November 2018 / Morning Brief
The Indian rupee little changed at 72.72 pair now at 72.86 against 72.51 previous close.
Pair to tip in 72.70- 73.00 range today.
The Indian rupee fell against the dollar in early trade, dragged down by dollar demand following a strong U.S. economic data and as oil prices rebounded from a seven-month low. Broad strength in the dollar has weighed on the Asian units, including rupee. Oil prices also rebounded, but remains at a manageable level.
The dollar built on last week's gains and rose towards a 16-month high on Monday as traders expect the U.S. Federal Reserve to keep tightening monetary policy. The Fed has reaffirmed its plan to raise interest rates by 25 basis points in December, followed by two more potential rate hikes by mid-2019 on the back of an upbeat economy and rising wage pressures.
The euro traded at $1.1322 on Monday, down 0.11 percent. The single currency lost ground versus the dollar in the previous three trading sessions as investor confidence weakened due to the standoff over Italy's budget. The European Commission(EU) rejected Italy's 2019 budget last month, saying it flouted a previous commitment to lower the country's deficit. The EU gave Rome until Tuesday to present a revised version of the budget. EU also cut its forecasts for Italian growth last week, adding to investor concerns over Italy's debts and economic outlook.
Oil prices rose by about one percent on Monday after top exporter Saudi Arabia announced a cut in supply for December, seen as a measure to halt a market slump that had seen crude decline by 20 percent since early October.
This week precious metals traders will be focusing on U.S. inflation data after the Federal Reserve indicated that it is on track to hike interest rates again in December and early next year.
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