Today Rupee opens at 66.86 per dollar, gains 16 paise in market
The Indian rupee gained in early trade on Thursday. It has opened higher by 16 paise at 66.86 per dollar versus 67.02 Wednesday.
The US dollar extended losses against a basket of major currencies after the US Federal Reserve left monetary policy unchanged and projected a less aggressive rise of interest rates in coming years.
US DOLLAR INDEX (USD)
The FOMC meeting was very important for the US Dollar Index which ended lower by 0.3 percent in yesterday’s trading session. The US Federal Reserve kept the key policy rates unchanged and hinted at the possibility of a rate hike by the end of 2016. Markets believe that Dec’16 would be that month since Nov’16 is when the Presidential Elections will be conducted and the US Fed does not want any unusual volatility. The US Fed Chairwoman expressed confidence in economic growth, but not enough to make a move this month. The committee also reduced its expectations both for economic growth and inflation this year to 1.8 percent and 4.7 percent respectively from 2 percent and 4.7 percent. All the above factors dented the demand for US Dollar which made an intraday low of 95.32 and closed at 95.67 levels on Wednesday.
OUTLOOK
Rupee is likely to trade higher in today’s trading session as markets discount the FOMC and BoJ monetary policy review where the interest rates was left unchanged. Weakness in the DX will in turn boost the demand of the Indian Rupee. Moreover, higher trading in global market equities will govern the trend of the Indian markets and its currency.
The US dollar extended losses against a basket of major currencies after the US Federal Reserve left monetary policy unchanged and projected a less aggressive rise of interest rates in coming years.
US DOLLAR INDEX (USD)
The FOMC meeting was very important for the US Dollar Index which ended lower by 0.3 percent in yesterday’s trading session. The US Federal Reserve kept the key policy rates unchanged and hinted at the possibility of a rate hike by the end of 2016. Markets believe that Dec’16 would be that month since Nov’16 is when the Presidential Elections will be conducted and the US Fed does not want any unusual volatility. The US Fed Chairwoman expressed confidence in economic growth, but not enough to make a move this month. The committee also reduced its expectations both for economic growth and inflation this year to 1.8 percent and 4.7 percent respectively from 2 percent and 4.7 percent. All the above factors dented the demand for US Dollar which made an intraday low of 95.32 and closed at 95.67 levels on Wednesday.
OUTLOOK
Rupee is likely to trade higher in today’s trading session as markets discount the FOMC and BoJ monetary policy review where the interest rates was left unchanged. Weakness in the DX will in turn boost the demand of the Indian Rupee. Moreover, higher trading in global market equities will govern the trend of the Indian markets and its currency.
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