USD/INR snaps 3-day fall as Fed points of more hikes next year

20 December 2018 / Morning Brief

Indian Rupee

• The Indian rupee little changed at 70.68 pair now at 70.56 against 70.40 previous close.
• Pair to tip in 70.40‐ 70.80 range today.
• USDINR snapped three‐day fall Thursday on buying by foreign banks tracking a strong dollar after the US Federal Reserve forecast two more rate hikes next year in its policy statement yesterday. However, market expectation was for Fed to hint of ending of tightening cycle. Foreign banks are on the buy side. Dollar remain strong after Fed hiked rates and also provided a less than dovish stance for future rate hike.

Global Currency

• The dollar was steady in Asian trade on Thursday, and was off its overnight lows after the Federal Reserve rowed back from a more aggressive policy tightening path even as it gave markets the impression of being much less cautious than they had anticipated.
• In a widely anticipated decision, the U.S. central bank hiked interest rates by 25 basis points and forecast fewer rate increases next year than it had at its September policy meeting. The Indian rupee weakened on Thursday tracking Asian peers after the US Federal Reserve's rate statement on Wednesday which sounded "less dovish" than expected.

Global Markets

• Oil prices fell on Thursday to erase most of their gains from the day before, resuming declines seen earlier in the week amid worries about oversupply and the outlook for the global economy. International benchmark Brent crude LCOc1 futures were down 66 cents, or 1.2 percent, at $56.58 per barrel.
• Gold steadied on Thursday, after declining about half a percent in the previous session as the U.S. Federal Reserve did not deliver as dovish a statement as some investors had expected. Asian shares retreated after the Fed raised rates, as expected, and kept most of its guidance for additional hikes next year.

Global Markets at one Glance

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