India Rupee Slips As Risk Sentiment Subdued Before Fed Decision

20 March 2019 / Morning Brief

Indian Rupee

• The Indian rupee little changed at 69.05 pair now at 69.09 against 68.9675 previous close.
• Pair to tip in 68.90-69.25 range today.
• The Indian rupee was lower against the dollar in early trade, as caution ahead of the Federal Reserve’s policy decision kept investors away from risk assets. Risk-off sentiment in the global markets has been weighing on the rupee, while importers will also step up greenback purchases. Volumes are expected to remain muted ahead of Fed decision and a local holiday tomorrow. Dollar purchases for next week’s FX swap auction will also be watched for further cues.

Global Currency

• The dollar rose against most of its peers on Wednesday as reports of renewed tension in U.S.-China trade negotiations supported safehaven bids, although the Federal Reserve's policy meeting later due in the day limited the greenback's gains. The index is still down 1.3 percent from a three-month high of 97.71 hit on March 7, on views the Fed will strike a dovish tone during its latest policy meeting.
• Investors are focused on the Fed to see whether the central bank will affirm its commitment to "patient" monetary policy and for clues about the likely path of U.S. borrowing costs. The Fed is due to make its rate announcement at 1800 GMT on Wednesday, when it is expected to keep its benchmark overnight interest rate unchanged.

Global Markets

• Oil prices were near 2019 highs on Tuesday, supported by supply cuts led by producer club OPEC. U.S. sanctions against oil producers Iran and Venezuela are also boosting prices, although traders said the market may be capped by rising U.S. output.
• Gold prices rose for a third consecutive session on Tuesday as the dollar weakened on expectations that the U.S. Federal Reserve will maintain a dovish tone at its monetary policy meeting this week.

Global Markets at one Glance

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