India Rupee Slips On Broad Dollar Strength; MPC Outcome In Focus

7 February 2019 / Morning Brief

Indian Rupee

• The Indian rupee little changed at 71.7275 pair now at 71.61 against 71.5525 previous close.
• Pair to tip in 71.40-71.90 range today.
• The Indian rupee fell against the dollar in early trade, tracking broad strength in the dollar against major currencies, while traders focused on the outcome of monetary policy at home today. All eyes are on India’s monetary policy decision today. Rupee will largely track movement in bonds market, Investors have priced a change in stance and status quo on rates, which will have a limited impact. However, in case of a rate cut, we can expect some rally in the local unit.

Global Currency

• Sterling GBP was marginally lower at $1.2927. The British pound has weakened by 1.3% in February due to Brexit woes. The UK is on course to leave the European Union on March 29 without a deal unless British PM Theresa May can convince the bloc to reopen the divorce agreement she reached in November and then sell it to sceptical British lawmakers. BoE is scheduled to meet later on Thursday and is widely expected to keep interest rates unchanged.
• The single currency was flat at $1.1364, having lost 0.45 percent of its value on Wednesday. The euro has lost around 1.3 percent over the last week as investors bet the European Central Bank will keep monetary policy accommodative on weaker-than-expected growth and low inflation in the common area.

Global Markets

• U.S. oil prices dipped on Thursday after U.S. crude inventories rose and as production levels in the country stayed at record levels, but OPEC-led supply cuts and the crisis in Venezuela supported markets.
• Gold on Thursday held near one-week lows touched in the previous session amid a stronger dollar, but worries over slowing global economic growth and the spectre of another US government shutdown kept the safe-haven metal above the key $1,300.

Global Markets at one Glance

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