Indian Rupee Jumps To Near 2-Month High As Oil Prices Crash
14 November 2018 / Morning Brief
The Indian rupee little changed at 72.16 pair now at 72.15 against 72.67 previous close.
Pair to tip in 71.90- 72.30 range today.
The Indian rupee rose to a near two-month high against dollar in early trade, as a slump in crude oil prices to multi-month lows improved the nation’s current account deficit outlook. Oil prices that were clouding the outlook of India’s macros saw a sharp reversal. Broad weakness in the dollar amid progress in Brexit deal also aided sentiments.
The sell-off in the dollar has been due to the improved risk sentiment around a potential Brexit deal and not because of any deterioration in the fundamentals of the U.S. economy. The dollar index a gauge of its value versus six major peers, traded at 97.05 on Wednesday, down 0.26 percent. The index hit a 16-month high of 97.69 on Monday. The dollar to strengthen further on the back of a robust U.S. economy, rising interest rates and its safe haven status.
The euro and sterling climbed higher on Wednesday as investor confidence rose on news Britain had struck a draft divorce deal with the European Union after more than a year of talks. The surge in the euro and sterling led investors to take profits on the U.S. dollar, which retraced from a 16-month high.
Oil markets struggled to find their footing on Wednesday after plunging by 7 percent the previous session, with surging supply and the spectre of faltering demand keeping investors on edge. International benchmark Brent crude oil futures LCOc1 were up 4 cents at $65.51 per barrel.
Gold shook off earlier losses on Tuesday to move back above the key $1,200-per-ounce level, benefiting from a slight retreat in the dollar after a rally driven by the U.S. interest rate outlook and Brexit talks.
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