Currency Insight

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 :



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.