Dollar edges up near 2-1/2-month high ahead of Fed outcome
The dollar edged closer to a 2-1/2-month high against a basket of currencies on Wednesday as traders awaited clues from the Federal Reserve about the timing of a U.S. interest rate increase.
A rate hike at the Fed’s two-day policy meeting which ends later on Wednesday is virtually priced out due to underlying concerns over a slowdown in China and the broader impact on global growth.
But many investors still expect the Fed to indicate that interest rates could rise as early as December. The index, which gauges the greenback against six rival currencies, stood at 96.958 , up about 0.1 percent from late U.S. trade and not far from a 2 1/2-month peak of 97.201 scaled on Friday.
Europe’s Quiet Currency War Besets Nations Losing Inflation Grip
From Stockholm, where the Riksbank will publish the minutes of its latest policy meeting on Tuesday, to Prague, Copenhagen and Zurich, officials in countries circling the currency bloc are waiting for the European Central Bank president to say next month whether he’ll expand stimulus. Only then will it be clear whether they’ll need to retaliate with more asset purchases, rate cuts and currency interventions of their own to dig in against imported disinflation.
Draghi’s bonanza of cheap cash is depressing financial returns in the euro area and driving investment flows into neighboring countries, pushing up their currencies and defeating their efforts to hit their own inflation targets. Looser monetary policy is in the cards even in countries where economic growth is strong and asset markets are overheating.
Rupee trades higher against US dollar
Snapping its 7 day losing streak, the rupee appreciated by 4 paise to 66.40 against the US dollar on Tuesday morning, tracking gains seen in other Asian currencies.
The domestic currency had dropped 68 paise to close at a nearly eight-week low of 66.44 against the greenback in the previous session on persistent dollar demand from banks and importers.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Actual | Expectation | Previous |
| 5:20am | JPY | Current Account | 0.78T | 1.50T | 1.59T |
| 7:00am | CNY | CPI y/y | 1.30% | 1.50% | 1.60% |
| CNY | PPI y/y | -5.90% | -5.90% | -5.90% | |
| 1:00pm | USD | FOMC Member Evans Speaks | |||
| 7:00pm | USD | Import Prices m/m | -0.10% | -0.10% | |
| Quick Glance : |
| Instrument | Price | %Chg | Volume | OI |
| USD/INR | 66.35 | 0.17 | 788526 | 960103 |
| EUR/INR | 71.20 | -0.82 | 37048 | 48836 |
| GBP/INR | 100.92 | 0.07 | 21059 | 41217 |
| JPY/INR | 53.78 | -0.64 | 7908 | 15311 |
| Technical touch : |
USDINR
Pair is trading near crucial resistance of 66.30 levels , any close above 66.50 is bullish for the Pair till 66.80 levels. Below 66.20 would act as an important support