India Rupee Higher As Dollar Index Extends Losses Before Fed Meet

19 March 2019 / Morning Brief

Indian Rupee

• The Indian rupee little changed at 68.55 pair now at 68.57 against 68.5275 previous close.
• Pair to tip in 68.30-68.70 range today.
• Indian rupee was higher against the U.S. currency in early trading amid broad weakness on the dollar before the beginning of the 2- day Federal Reserve meeting. Foreign portfolio inflows and exporter selling continue to keep upside on the rupee intact, while momentum remains firmly in favor of the rupee, we think the move from near 71.50 to the current levels has been too quick and a correction is around the corner. Importers’ dollar bids limited gains.

Global Currency

• The dollar was on the defensive on Tuesday, weighed by growing expectations the Federal Reserve would adopt a more accommodative policy outlook this week and concerns about slower U.S. economic growth. The index has lost 1.3 percent after hitting a three-month high of 97.710 on March 7, on views the Fed will strike a dovish tone at its two-day policy meeting due to start later on Tuesday.
• Sterling also gained, rising almost one-fifth of a percent to $1.3274. It had seesawed overnight after the speaker of Britain's parliament said Prime Minister Theresa May's Brexit deal could not be voted on again unless a different proposal was submitted. Bank of England is expected to leave its interest rate outlook 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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