Rupee Opens Lower On Dollar Index Rebound

Rupee Opens Lower On Dollar Index Rebound

26 Jun 2019 09:10 AM

USD/INR – The Indian rupee opened lower against the U.S. currency in the wake of the dollar’s recovery against major and regional currencies. The rupee opened at 69.40 to the dollar compared with its previous close of 69.34. The dollar index edged higher in Asia trading on Wednesday, adding to yesterday’s advance of 0.2%. Yesterday, the gauge had fallen to a three-month low on bets of a dovish Federal Reserve. However, safe-haven demand amid a selloff in U.S. equities helped the dollar recover from the lows. Yesterday, Fed Chairman Jerome Powell said that policymakers will be eyeing economic developments closely and once again reiterated his concerns about the world economy. Powell’s comments came after the authority last week indicated that it may cut borrowing costs to support the economy, prompting bets that the Fed fund target rate would come down as early as next month.

EUR/USD – The euro hit a three-month high of $1.1405 in early Asia trade. The dollar edged up from a three-month low on Wednesday, as investors dialled back expectations for aggressive U.S. rate cuts next month but broader conviction the Federal Reserve will need to ease policy soon capped greenback gains. Fed Chairman Jerome Powell on Tuesday stressed the central bank's independence from U.S. President Donald Trump, who is pushing for aggressive rate cuts. While this hosed down expectations for a half percentage point cut at the Fed's July meeting, investors are still expecting at least a quarter percentage point reduction.

GBP/USD – The British pound traded at $1.2690, stuck near a session low before the Bank of England publishes its closely-watched quarterly inflation forecasts later on Wednesday. The BoE has said rates would need to rise in a gradual fashion as long as Britain avoids a no-deal exit from the European Union. However, sterling remains dogged by concerns that eurosceptic Boris Johnson will become Britain's next prime minister, increasing the chance of a no-deal Brexit.

USD/JPY – The yen traded off its highest versus the dollar in more than five months and is likely to edge higher as military tensions between the United States and Iran boost demand for safe-haven currencies. However, trading is likely to subdued as the focus shifts to a meeting between Trump and Chinese President Xi Jinping at a Group of 20 summit over the weekend, but expectations are low for a breakthrough that would end the dispute between the world's two-largest economies. The U.S. currency was higher at 107.45 yen after falling to 106.77 yen, its lowest since its flash crash in early January.

Currency Range for today

Currency Pair Lower Upper
USD/INR 69.20 69.70
EUR/INR 78.40 79.20
GBP/INR 87.70 88.50
JPY/INR 0.6435 0.6495

Important data releases today 

Time Ccy Event Forecast Previous
6:00 PM USD Core Durable Goods Orders (MoM) (May) 0.1% 0.0%
8:00 PM USD Crude Oil Inventories -2.540M -3.106M

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