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.
China welcomes IMF backing to make yuan world reserve currency
China on Saturday welcomed backing from IMF experts that the yuan should be included in its reserve currencies, saying the move would strengthen the world’s financial system.
Now the world’s second-largest economy, China asked last year for the yuan to be added to the elite basket of SDR currencies, but until recently it was considered too tightly controlled to qualify.
| Important events and their explanation: |
| Time ( IST) | Currency | Economic Data | Actual | Expectation |
| 7:00pm | USD | CPI m/m | 0.20% | -0.20% |
| USD | Core CPI m/m | 0.20% | 0.20% | |
| 7:45pm | USD | Capacity Utilization Rate | 77.50% | 77.50% |
| USD | Industrial Production m/m | 0.10% | -0.20% | |
| 17th-19th | USD | Mortgage Delinquencies | 5.30% | |
Explanation:- Out of these above data US CPI may decide the medium term trend of the price USD. Any positive news may be positive for the USD
| Quick Glance : |
| Instrument | Price | %Chg | Volume | OI |
| USD/INR | 66.00 | 0.17 | 788526 | 960103 |
| EUR/INR | 70.86 | -0.82 | 37048 | 48836 |
| GBP/INR | 100.20 | 0.07 | 21059 | 41217 |
| JPY/INR | 53.70 | -0.64 | 7908 | 15311 |
| Technical touch : |
EURINR
As seen pair is trading near its crucial support levels which is at 70.56 levels. Hence we assume any breakout below 70.50 may further weaken the Euro till 70.20 levels and upside strong resistance at 71.40 levels.
