Rupee Opens Higher As Dollar Slumps Ahead Of Fed Meet

Rupee Opens Higher As Dollar Slumps Ahead Of Fed Meet

28 Jan 2019 09:11 AM

USD/INR – The Indian rupee opened higher against the dollar amid the U.S. currency’s broad decline a day before the beginning of the Federal Reserve’s policy meeting. The rupee opened at 71.00 versus its previous close of 71.1750. The Fed’s two-day meeting that begins tomorrow will most probably reinforce its recent dovish stance and be supportive of emerging market currencies. The Wall Street Journal’s report that Fed officials are considering an earlier-than-expected end to its bond portfolio wind-down is further expected to aid the rupee. The dollar index received little help from the temporary end to the U.S. federal shutdown. President Donald Trump on Friday agreed to end the shutdown without receiving funding for the Mexico wall but said that the closure would resume if he was not satisfied with the outcome of the security negotiations that will now take place between the Democrats and Republicans.

EUR/USD – The euro was marginally higher at $1.1410. The single currency managed to cling on to a 0.4% gain made last week despite the European Central Bank downgrading its growth forecasts for the near term. Growth data out of Europe's economic powerhouses such as Germany and France has been weaker-than-expected and analysts expect the ECB to remain dovish for an extended period. Traders believe Europe's slowdown and a dovish ECB are priced into the euro, which has traded in a $1.12-$1.16 range over the last three months.

GBP/USD – Sterling was up modestly, after rising above the key psychological level of $1.32. The cable gained 2.5% last week after a report that Northern Ireland's Democratic Unionist Party had privately decided to offer conditional backing for British Prime Minister Theresa May's Brexit deal this week. However, Ireland's Deputy Prime Minister Simon Coveney said on Sunday the backstop was already a compromise drawn up to meet May's negotiating red lines, and the EU and Ireland were united in the view it was not going to change. Analysts expect the sterling to remain volatile. Britain is set to leave the European Union on March 29, but the country’s members of parliament remain far from agreeing a divorce deal. GBP/USD was last trading at $1.3195.

USD/JPY - The yen added 0.2% in early Asian trade at 109.35. The dollar has gained around 1.3% on the yen over the last two weeks. Not helping the yen was the Bank of Japan's downgrade of its inflation forecasts last week when it also maintained its accommodative monetary policy, as widely expected. Moreover, Japanese investors have been net buyers of foreign bonds over the last few weeks, stoking demand for dollars. This likely explains why the safe-haven yen has not appreciated during this period even though risks of a global economic slowdown have rattled investor sentiment.

Currency Range for today

Currency Pair Upper Lower
USD/INR 70.80 71.30
EUR/INR 80.70 81.45
GBP/INR 93.20 94.00
JPY/INR 0.6465  0.6530

 Important events today

Date Time Currency Event
28-Jan-19 7:30 PM EUR ECB President Draghi Speaks
28-Jan-19 8:00 PM GBP BoE Gov Carney Speaks






Date : 28-Jan-2019