Indian Rupee At 1-Week High As Oil Slips; Fed Meet Eyed

18 December 2018 / Morning Brief

Indian Rupee

• The Indian rupee little changed at 71.33 pair now at 71.28 against 71.5725 previous close.
• Pair to tip in 71.15 71.50 range today.
• The Indian rupee rose to a more than one‐week high against the dollar in early trade, as lower crude oil prices and weak U.S. economic data outweighed broad sell-off in global equities amid caution ahead of the Federal Reserve’s policy meet that starts today. Fall in oil prices will help India to narrow its current account deficit, which has been supporting sentiments for the rupee at a time when concerns over global economic growth has kept shares under pressure.

Global Currency

• The dollar remained under pressure on Tuesday as markets counted down to a crucial Federal Reserve meeting amid speculation it will soon hit the pause button to its monetary tightening cycle in the face of rising risks to global growth. We are expecting a dovish hike by the Fed. The data has not been tepid enough for the central bank not to hike in December.
• Most emerging Asian currencies moved only marginally on Monday, as the dollar held near a 18‐month high ahead of an expected U.S. Federal Reserve rate hike this week.

Global Markets

• Oil prices dropped over 1 percent on Tuesday, falling for a third straight session, as reports of inventory builds and forecasts of record shale output in the United States, currently the world's biggest producer, stoked worries about oversupply.
• Gold prices rose slightly on Tuesday ahead of a key U.S. Federal Reserve meeting, as speculation that signs of economic turbulence may prompt the central bank to put brakes soon on its monetary tightening cycle kept the dollar under pressure. The (FOMC) is widely expected to raise interest rates at its two‐day meeting starting later in the day, but the focus will be on its outlook for 2019.

Global Markets at one Glance

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