FX weekly outlook
|Major Developments
- Policymakers at BoE voted unanimously to leave its main interest rate unchanged at a record low of 0.1%
- The US Federal Reserve kept its interest rate unchanged at 0.25%
- First-time filings for unemployment benefits jumped for the week ending Sept.18, hitting the highest level in a month. On a seasonally adjusted basis claims totalled to 315K, an increase from the previous week`s upwardly revised of 335K.
- India`s foreign exchange reserves declined by $1.47 billion to $639.642 billion in the week ended September 17
USDINR Weekly performance & Outlook
- The USDINR pair made a gap up opening at 73.81 levels. The pair remained volatile throughout the week and finally closed at 73.70 levels.
- The USDINR pair remained steady the first half of the week as investors eagerly waited for the FOMC meeting outcome.
- Indian benchmark indices surged over 1% each amid strong global cues after a weaker dollar across the board. The number of Americans filing for unemployment benefits increased by 16000.
- U.S. Policymakers signaled through their updated “dot plot” forecast of the fed funds rate that they’re evenly divided about whether to raise the short-term benchmark next year. That’s a shift from June when 11 of 18 officials expected to leave it unchanged in the current range of 0% to 0.25%.
- The Fed and the BoE prepared the markets for trimming of asset purchases. Yields across DM economies inched higher this week.
- Markets would remain cautious ahead of key macroeconomic datasets such GDP and PMI datasets from U.S and Manufacturing PMI numbers from India.
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